UNITED STATES LIME & MINERALS, INC.
2022
Annual Report and Form 10-K
COMPANY PROFILE
United States Lime & Minerals, Inc., headquartered in Dallas, Texas, through its Lime and Limestone Operations is
a manufacturer of lime and limestone products, supplying primarily the construction (including highway, road and building
contractors), industrial (including paper and glass manufacturers), metals (including steel producers), environmental
(including municipal sanitation and water treatment facilities and flue gas treatment processes), roof shingle manufacturers,
agriculture (including poultry producers), and oil and gas services industries.
United States Lime & Minerals, Inc.’s common stock is listed on the Nasdaq Global Market under the symbol
USLM.
SELECTED FINANCIAL DATA
(dollars in thousands, except per share amounts)
Operations data:
Lime and limestone
revenues
Other revenues (1)
Total revenues
Lime and limestone gross
2022
2021
2020
2019
2018
2017
2016
$
$
$
233,421
2,729
236,150
187,365 159,707
997
189,255 160,704
1,890
156,981
1,296
158,277
141,922
2,513
144,435
142,612
2,232
144,844
137,190
2,092
139,282
profit
Total gross profit
$
Other gross profit (loss) (1) $
$
$
$
$
Operating profit
Interest expense
Net income (2)
Weighted-average shares
(diluted) outstanding
Diluted net income per
share (2)
$
Cash dividends per share (3) $
68,951
1,391
70,342
54,783
254
45,429
58,651
609
59,260
46,417
250
37,045
47,983
(396)
47,587
33,869
248
28,223
42,043
(367)
41,676
29,246
244
26,056
29,482
1,004
30,486
20,002
243
19,685
33,652
728
34,380
24,227
241
27,148
33,032
60
33,092
23,480
246
17,754
5,680,409
5,668,359 5,639,863 5,621,138 5,602,377 5,588,496 5,571,973
8.00
0.80
6.54
0.64
5.00
0.64
4.64
5.89
3.51
0.54
4.86
0.54
3.19
0.50
Balance sheet data:
Working capital (4)
Total assets
Stockholders’ equity
Stockholders’ equity per
$
$
$
174,453
367,772
321,088
139,242 112,408
316,196 279,098
278,206 243,192
83,276
247,037
217,132
93,395
244,671
222,967
108,656
228,446
205,252
95,928
210,159
179,639
outstanding common share $
56.51
49.10
43.06
38.62
39.76
36.73
32.23
(1) Other revenues and Other gross profit (loss) include the Company’s natural gas interests.
(2) Net income and Diluted net income per share for the year ended December 31, 2017 includes the one-time effect of a $7,447 ($1.33 per
share diluted) income tax benefit resulting from reduced federal income tax rates under the Tax Cuts and Jobs Act of 2017.
(3) Includes a $5.35 special cash dividend paid in December 2019.
(4) Current assets minus current liabilities.
2023 ANNUAL MEETING OF SHAREHOLDERS
The 2023 Annual Meeting of Shareholders will be held at the Residence Inn Dallas by the Galleria, 5460 James
Temple Drive, Dallas, Texas, 75240, on Friday, May 5, 2023, commencing at 10:00 a.m. local time.
All shareholders are urged to attend the 2023 Annual Meeting. A formal Notice of the Annual Meeting, Proxy
Statement, and Proxy Card accompany this Annual Report and Form 10-K.
TO OUR SHAREHOLDERS:
We are pleased with our 2022 performance and our successes in addressing the inflationary and supply chain challenges
that we faced throughout the year. Due to our continued strong cash flows, our cash balances increased to $133.4 million at
December 31, 2022, from $105.4 million at December 31, 2021. At the same time, in 2022, we paid $4.5 million in dividends,
made $26.8 million of capital investments and acquired Mill Creek Dolomite for $5.6 million without incurring any debt.
During 2022, our revenues were $236.2 million, compared to $189.3 million in 2021, an increase of $46.9 million, or
24.8%. Revenues from our Lime and Limestone Operations increased $46.1 million, or 24.6%, to $233.4 million in 2022,
compared to $187.4 million in 2021. Demand for our lime and limestone products increased during the year, principally from
our construction and oil and gas services customers. In addition, we realized a 10.6% average increase in prices for our lime and
limestone products in 2022, compared to 2021.
Our gross profit increased to $70.3 million for 2022 from $59.3 million for 2021, an increase of $11.1 million, or 18.7%.
Gross profit from our Lime and Limestone Operations for 2022 was $69.0 million, compared to $58.7 million in 2021, an increase
of $10.3 million, or 17.6%. The increase in gross profit in 2022, compared to 2021, resulted primarily from the increased revenues
discussed above, partially offset by increased lime and limestone production costs, principally from higher transportation, energy,
labor, and supplies costs. Our gross profit for 2022 and 2021 also included $1.4 million and $0.6 million, respectively, from our
natural gas interests.
Our net income in 2022 increased $8.4 million, or 22.6%, to $45.4 million, from $37.0 million in 2021. Diluted net income
per share increased $1.46 to $8.00 in 2022, from $6.54 in 2021.
We continue experiencing rising costs, especially transportation, energy, labor, and supplies costs, and supply chain delays
and disruptions remain a challenge. In order to continue to successfully maintain and seek to increase our profitability, we remain
focused on reliably delivering consistent quality to our customers and increasing the efficiency of our operations, and, when the
opportunity presents itself, making strategic acquisitions such as the acquisition of Carthage Crushed Limestone in July 2020
and Mill Creek Dolomite in February 2022.
We are sad to report the passing of two of our valued directors during 2022. Ed Odishaw had served as a director since
1993, and Ray Harlin had served as a director since 2018. We appreciate their many contributions throughout their years of
dedicated service to the Company.
We are grateful for the continued support of our dedicated employees, our vital customers and vendors, and our loyal
shareholders during this past year. In the face of the many challenges ahead, we remain committed to growing and improving
our performance to further enhance shareholder value in 2023. We believe that our investments in our people, our facilities, and
our processes have us well positioned, both operationally and financially, to meet those challenges together.
Timothy W. Byrne
President and CEO
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 000-04197
United States Lime & Minerals, Inc.
(Exact name of Registrant as specified in its charter)
Texas
(State or other jurisdiction of
incorporation or organization)
5429 LBJ Freeway, Suite 230, Dallas, Texas
(Address of principal executive offices)
75-0789226
(I.R.S. Employer
Identification Number)
75240
(Zip code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Registrant’s telephone number, including area code: (972) 991-8400
Title of each class
Common stock, $0.10 par value
Trading Symbol(s)
USLM
Name of each exchange on which registered
The Nasdaq Stock Market LLC
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act
No ☒
during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☐
☐
Accelerated filer ☒
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of Common Stock held by non-affiliates computed as of the last business day of the Registrant’s quarter ended
June 30, 2022: $216,195,725.
Number of shares of Common Stock outstanding as of February 22, 2023: 5,684,569.
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates information by reference from the Registrant’s definitive Proxy Statement to be filed for its 2023 Annual Meeting of
Shareholders. Part IV incorporates certain exhibits by reference from the Registrant’s previous filings.
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TABLE OF CONTENTS
BUSINESS
ITEM 1.
ITEM 1A. RISK FACTORS
ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 2.
ITEM 3.
ITEM 4. MINE SAFETY DISCLOSURES
PROPERTIES
LEGAL PROCEEDINGS
Part I
Part II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
ITEM 6.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
[RESERVED]
RESULTS OF OPERATIONS
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8.
ITEM 9.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9B. OTHER INFORMATION
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
Part III
INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Part IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
ITEM 16. FORM 10-K SUMMARY
SIGNATURES
ii
ITEM 1. BUSINESS.
General.
PART I
United States Lime & Minerals, Inc. (the “Company,” the “Registrant,” “We” or “Our”), which was
incorporated in 1950, conducts its business primarily through its Lime and Limestone Operations segment. The
Company’s Other operations relate to its natural gas interests.
The Company’s principal corporate office is located at 5429 LBJ Freeway, Suite 230, Dallas, Texas 75240. The
Company’s telephone number is (972) 991-8400 and its internet address is www.uslm.com. The Company’s annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports
filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), as well as the Company’s definitive proxy statement filed pursuant to Section 14(a) of the Exchange Act, are
available free of charge on the Company’s website as soon as reasonably practicable after the Company electronically
files such material with, or furnishes it to, the Securities and Exchange Commission (the “SEC”).
Lime and Limestone Operations.
Business and Products. The Company, through its Lime and Limestone Operations, is a manufacturer of lime
and limestone products, supplying primarily the construction (including highway, road and building contractors),
industrial (including paper and glass manufacturers), metals (including steel producers), environmental (including
municipal sanitation and water treatment facilities and flue gas treatment processes), roof shingle manufacturers,
agriculture (including poultry producers), and oil and gas services industries. The Company is headquartered in Dallas,
Texas and operates lime and limestone plants and distribution facilities in Arkansas, Colorado, Louisiana, Missouri,
Oklahoma and Texas through its wholly owned subsidiaries, Arkansas Lime Company, ART Quarry TRS LLC (DBA
Carthage Crushed Limestone), Colorado Lime Company, Mill Creek Dolomite, LLC, Texas Lime Company, U.S. Lime
Company, U.S. Lime Company-Shreveport, U.S. Lime Company-St. Clair and U.S. Lime Company-Transportation.
The Company extracts high-quality limestone from its open-pit quarries and underground mines and then
processes it for sale as pulverized limestone, aggregate, quicklime, hydrated lime and lime slurry. Pulverized limestone
(also referred to as ground calcium carbonate) (“PLS”) is produced by applying heat to dry the limestone, which is then
ground to granular and finer sizes. Quicklime (calcium oxide) is produced by heating limestone to very high
temperatures in kilns in a process called calcination. Hydrated lime (calcium hydroxide) is produced by reacting
quicklime with water in a controlled process. Lime slurry (milk of lime) is a suspended solution of calcium hydroxide
produced by mixing quicklime with water in a lime slaker.
PLS is used in the production of construction materials such as roof shingles and asphalt paving, as an additive
to agriculture feeds, in the production of glass, as a soil enhancement, in flue gas treatment for utilities and other
industries requiring scrubbing of emissions for environmental purposes and for mine safety dust in coal mining
operations. Quicklime is used primarily in metal processing, in flue gas treatment, in soil stabilization for highway, road
and building construction, as well as for oilfield roads and drill sites, in the manufacturing of paper products and in
municipal sanitation and water treatment facilities. Hydrated lime is used primarily in municipal sanitation and water
treatment facilities, in soil stabilization for highway, road and building construction, in flue gas treatment, in asphalt as
an anti-stripping agent, as a conditioning agent for oil and gas drilling mud and in the production of chemicals. Lime
slurry is used primarily in soil stabilization for highway, road and building construction.
Product Sales. In 2022, the Company sold almost all of its lime and limestone products in the states of
Arkansas, Arizona, Colorado, Illinois, Iowa, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas.
Sales were made primarily by the Company’s ten sales employees who call on current and potential customers and solicit
orders, which are generally made on a purchase-order basis. The Company also receives orders in response to bids that it
prepares and submits to current and potential customers.
Principal customers for the Company’s lime and limestone products are construction customers (including
highway, road and building contractors), industrial customers (including paper manufacturers and glass manufacturers),
1
metals producers (including steel producers), environmental customers (including municipal sanitation and water
treatment facilities and flue gas treatment processes), roof shingle manufacturers, poultry and cattle feed producers, and
oil and gas services companies.
Approximately 650 customers accounted for the Company’s sales of lime and limestone products during 2022.
No single customer accounted for more than 10% of such sales. The Company is generally not subject to significant
customer demand and credit risks as its customers are considerably diversified within our geographic region and by
industry concentration. However, given the nature of the lime and limestone industry, the Company’s profits are very
sensitive to changes in sales volumes, prices, and costs.
Lime and limestone products are transported by truck and rail to customers generally within a radius of 400
miles of each of the Company’s plants. All of the Company’s 2022 sales were made within the United States.
Seasonality. The Company’s sales have typically reflected seasonal trends, with the largest percentage of total
annual shipments and revenues normally being realized in the second and third quarters. Lower seasonal demand
normally results in reduced shipments and revenues in the first and fourth quarters. Inclement weather conditions
generally have a negative impact on the demand for lime and limestone products supplied to construction-related
customers, as well as on the Company’s open-pit quarrying operations.
Limestone Mineral Resources and Reserves. The Company’s limestone mineral resources and reserves
contain at least 96% calcium carbonate (CaCO3). The Company has three subsidiaries that extract limestone from
open-pit quarries: Texas Lime Company (“Texas Lime”), which is located near Cleburne, Texas; Arkansas Lime
Company (“Arkansas Lime”), which is located near Batesville, Arkansas; and Mill Creek Dolomite, LLC (“Mill
Creek”), which the Company acquired on February 9, 2022, located near Mill Creek, Oklahoma. U.S. Lime Company-
St. Clair (“St. Clair”) extracts limestone from an underground mine located near Marble City, Oklahoma. Carthage
Crushed Limestone (“Carthage”) extracts limestone from an underground mine located in Carthage, Missouri. Colorado
Lime Company (“Colorado Lime”) owns property containing limestone deposits at Monarch Pass, Colorado. Existing
crushed stone stockpiles on the property are being used to provide feedstock to the Company’s plant in Delta, Colorado.
Access to all properties is provided by paved roads and, in the case of Arkansas Lime, St. Clair, Carthage, and Mill
Creek, also by rail. The Company mined approximately 4 million tons of limestone from its quarries and mines during
the year ended December 31, 2022, and approximately 3 million tons of limestone during each of the years ended
December 31, 2021 and 2020.
The Company engaged SYB Group, LLC (“SYB”) to serve as the Qualified Person (“QP”) to prepare estimates
of the limestone mineral resources and reserves, as of December 31, 2021, at all of its properties except for Carthage,
Mill Creek, and Colorado Lime. The QP was not retained to prepare estimates at those locations because the Company
has not completed a drilling program sufficient to enable the QP to prepare estimates of the limestone mineral resources
and reserves at those properties. As of December 31, 2022, the QP assessed the underlying material assumptions and
information set forth in the technical report summaries for the Texas Lime Quarry, the Batesville Quarry, the Love
Hollow Quarry, and the St. Clair Mine, including assumptions related to modifying factors, price estimates, and
scientific and technical information. During 2022, no new drilling programs were instituted at the locations covered by
the QP’s technical report summaries as of December 31, 2021. Resources and reserves were calculated using an $11.05
per ton price assumption based on the U.S. Geological Survey Mineral Commodity Summaries 2021. The U.S.
Geological Survey Mineral Commodity Summaries 2022 increased the price to $12.70 per ton, but the QP has
determined that the change in price did not have a material impact on the calculation of the reserves and resources and
that all material assumptions and information remained current as of December 31, 2022.
Summaries of the Company’s total limestone mineral resources and reserves for all properties other than
Carthage, Mill Creek, and Colorado Lime as of December 31, 2022 and 2021 are shown below. The terms “Mineral
Resource”, “Measured Resources”, “Indicated Resources”, “Mineral Reserves”, “Proven Reserves” and “Probable
Reserves” are defined in accordance with SEC Regulation S-K subpart 229.1300 governing disclosures by registrants
engaged in mining operations. Limestone mineral reserves are included in limestone mineral resources, net of any
mining loss factors.
2
Summary of Total Limestone Mineral Resources as of December 31, 2022
Measured
Resources (tons)
281,539,000
Cutoff Grade
Above 96.0%
(CaCO3)
Indicated
Resources (tons)
137,986,000
Cutoff Grade
Above 96.0%
(CaCO3)
Measured + Indicated
Resources (tons)
419,525,000
Cutoff Grade
Above 96.0%
(CaCO3)
Summary of Total Limestone Mineral Resources as of December 31, 2021
Measured
Resources (tons)
284,993,000
Cutoff Grade
Above 96.0%
(CaCO3)
Indicated
Resources (tons)
137,986,000
Cutoff Grade
Above 96.0%
(CaCO3)
Measured + Indicated
Resources (tons)
422,979,000
Cutoff Grade
Above 96.0%
(CaCO3)
Summary of Total Limestone Mineral Reserves as of December 31, 2022
Proven Reserves
(tons)
161,071,000
Cutoff Grade
Above 96.0%
(CaCO3)
Probable Reserves
(tons)
72,037,000
Cutoff Grade
Above 96.0%
(CaCO3)
Total Mineral Reserves
(tons)
233,108,000
Cutoff Grade
Above 96.0%
(CaCO3)
Summary of Total Limestone Mineral Reserves as of December 31, 2021
Proven Reserves
(tons)
164,146,000
Cutoff Grade
Above 96.0%
(CaCO3)
Probable Reserves
(tons)
72,037,000
Cutoff Grade
Above 96.0%
(CaCO3)
Total Mineral Reserves
(tons)
236,183,000
Cutoff Grade
Above 96.0%
(CaCO3)
Set forth below is a description of each of the Company’s mining properties. The Company considers the four
mining properties associated with Texas Lime, Arkansas Lime (2 properties) and St. Clair to be material for purposes of
application of SEC Regulation S-K subpart 229.1300. Included in the description of each of these four material mining
properties are disclosures with respect to such property’s limestone mineral resources and reserves. For additional
information with respect to these four properties, see the Technical Report Summaries prepared by SYB, as of
December 31, 2021, in Exhibits 96.1-96.4 to this Report on Form 10-K.
Texas Lime owns a quarry and has PLS, lime, and hydrated lime production facilities, located on approximately
5,200 acres of land in Johnson County, Texas that contains known high-quality limestone resources in a bed averaging
25 to 35 feet in thickness (the “Texas Lime Quarry”). As of December 31, 2022, Texas Lime had 115 million tons of
measured limestone mineral resources, which included 62 million tons of proven reserves plus 48 million tons of
probable reserves. Assuming the current level of production and recovery rate is maintained, the Company estimates that
these reserves are sufficient to sustain operations for approximately 73 years. The tables below summarize the limestone
mineral resources and reserves at the Texas Lime Quarry as of December 31, 2022 and 2021.
Texas Lime Quarry - Summary of Limestone Mineral Resources
as of December 31, 2022
114,838,000 96.0(CaCO3)
Resource Category Resources (tons) Cutoff Grade Processing Recovery
Measured Mineral
Resources
Indicated Mineral
Resources
Total Measured +
Indicated
114,838,000 96.0(CaCO3)
N/A
N/A
N/A
-
-
as of December 31, 2021
Resources (tons)
Cutoff Grade Processing Recovery
116,533,000
96.0(CaCO3)
-
-
116,533,000
96.0(CaCO3)
N/A
N/A
N/A
3
Texas Lime Quarry - Summary of Limestone Mineral Reserves
as of December 31, 2022
as of December 31, 2021
Reserves (tons) Cutoff Grade Mining Recovery
Resource Category
Proven Reserves
61,564,000 96.0(CaCO3)
Probable Reserves 47,532,000 96.0(CaCO3)
95%
95%
Reserves (tons)
63,174,000
47,532,000
Cutoff Grade
96.0(CaCO3)
96.0(CaCO3)
Mining
Recovery
95%
95%
Total Mineral
Reserves
109,096,000 96.0(CaCO3)
95%
110,706,000
96.0(CaCO3)
95%
Arkansas Lime owns a quarry, and has PLS, lime, and hydrated lime production facilities, located on
approximately 1,260 acres of land located in Independence County, Arkansas that contains known high-quality limestone
resources in a bed averaging 60 feet in thickness (the “Batesville Quarry”). As of December 31, 2022, the Batesville
Quarry had 8 million tons of indicated limestone mineral resources and 15 million tons of measured limestone mineral
resources, which included 8 million tons of proven reserves and 3 million tons of probable reserves. Based on forecasted
production levels and recovery rates, the Company estimates that these reserves are sufficient to sustain operations for
approximately 24 years. The tables below summarize the limestone mineral resources and reserves at the Batesville
Quarry as of December 31, 2022 and 2021.
Batesville Quarry - Summary of Limestone Mineral Resources
as of December 31, 2022
14,921,000 96.0(CaCO3)
Resource Category Resources (tons) Cutoff Grade Processing Recovery
Measured Mineral
Resources
Indicated Mineral
Resources
Total Measured +
Indicated
23,160,000 96.0(CaCO3)
8,239,000 96.0(CaCO3)
N/A
N/A
N/A
as of December 31, 2021
Resources (tons)
Cutoff Grade Processing Recovery
16,010,000
96.0(CaCO3)
8,239,000
96.0(CaCO3)
24,249,000
96.0(CaCO3)
N/A
N/A
N/A
Resource Category
Proven Reserves
Probable Reserves
Total Mineral
Reserves
Batesville Quarry - Summary of Limestone Mineral Reserves
as of December 31, 2022
Reserves (tons) Cutoff Grade Mining Recovery1
8,192,000 96.0(CaCO3)
3,458,000 96.0(CaCO3)
82%/75%
82%/75%
as of December 31, 2021
Reserves (tons)
9,085,000
3,458,000
Cutoff Grade Mining Recovery1
96.0(CaCO3)
96.0(CaCO3)
82%/75%
82%/75%
11,650,000 96.0(CaCO3)
82%/75%
12,543,000
96.0(CaCO3)
82%/75%
1Mining recovery is listed as open pit/underground recovery.
In 2005, the Company acquired an additional quarry associated with Arkansas Lime, located on approximately
2,500 acres of land in Izard County, Arkansas (the “Love Hollow Quarry”). In 2022, the Company improved and
developed the transportation infrastructure between the Love Hollow Quarry and Arkansas Lime’s production facilities
and incurred other development costs to prepare the Love Hollow Quarry for mining and began sourcing a portion of the
Arkansas Lime plant’s limestone requirements from the Love Hollow Quarry. As of December 31, 2022, the Love
Hollow Quarry had 116 million tons of measured limestone mineral resources, which included 68 million tons of proven
reserves and 21 million tons of probable reserves. Based on forecasted production levels and recovery rates, the
Company estimates that these reserves are sufficient to sustain operations for approximately 80 years. The tables below
summarize the limestone mineral resources and reserves at the Love Hollow Quarry as of December 31, 2022 and 2021.
4
Love Hollow Quarry - Summary of Limestone Mineral Resources
as of December 31, 2022
Resource Category Resources (tons) Cutoff Grade Processing Recovery
Measured Mineral
Resources
Indicated Mineral
Resources
Total Measured +
Indicated
115,741,000 96.0(CaCO3)
115,741,000 96.0(CaCO3)
N/A
N/A
N/A
-
-
as of December 31, 2021
Resources (tons)
Cutoff Grade Processing Recovery
115,802,000
96.0(CaCO3)
-
-
115,802,000
96.0(CaCO3)
N/A
N/A
N/A
Love Hollow Quarry - Summary of Limestone Mineral Reserves
as of December 31, 2022
Reserves (tons) Cutoff Grade Mining Recovery1
Resource Category
Proven Reserves
68,442,000 96.0(CaCO3)
Probable Reserves 21,047,000 96.0(CaCO3)
95%/75%
95%/75%
as of December 31, 2021
Reserves (tons)
68,500,000
21,047,000
Cutoff Grade Mining Recovery1
96.0(CaCO3)
96.0(CaCO3)
95%/75%
95%/75%
Total Mineral
Reserves
89,489,000 96.0(CaCO3)
95%/75%
89,547,000
96.0(CaCO3)
95%/75%
1Mining recovery is listed as open pit/underground recovery.
St. Clair operates an underground mine and has PLS, lime, and hydrated lime production facilities located on
approximately 1,400 acres that it owns in Sequoyah County, Oklahoma containing high-quality limestone resources and
also has long-term mineral leases that provide the right to mine high-quality limestone resources contained in
approximately 1,340 adjacent acres (the “St. Clair Mine”). As of December 31, 2022, the St. Clair Mine had 130 million
tons of indicated limestone mineral resources and 36 million tons of measured limestone mineral resources, including
23 million tons of proven reserves. Assuming the current level of production and recovery rate is maintained, the
Company estimates that these reserves are sufficient to sustain operations for approximately 52 years. The tables below
summarize the limestone mineral resources and reserves at the St. Clair Mine as of December 31, 2022 and 2021.
St. Clair Mine - Summary of Limestone Mineral Resources
as of December 31, 2022
36,039,000 96.0(CaCO3)
Resource Category Resources (tons) Cutoff Grade Processing Recovery
Measured Mineral
Resources
Indicated Mineral
Resources
Total Measured +
Indicated
129,747,000 96.0(CaCO3)
165,786,000 96.0(CaCO3)
N/A
N/A
N/A
as of December 31, 2021
Resources (tons)
Cutoff Grade Processing Recovery
36,648,000
96.0(CaCO3)
129,747,000
96.0(CaCO3)
166,395,000
96.0(CaCO3)
N/A
N/A
N/A
Resource Category
Proven Reserves
Probable Reserves
Total Mineral
Reserves
St. Clair Mine - Summary of Limestone Mineral Reserves
as of December 31, 2022
Reserves (tons) Cutoff Grade Mining Recovery
22,873,000 96.0(CaCO3)
96.0(CaCO3)
81%
81%
-
as of December 31, 2021
Reserves (tons)
23,387,000
-
Cutoff Grade Mining Recovery
96.0(CaCO3)
96.0(CaCO3)
81%
81%
22,873,000 96.0(CaCO3)
81%
23,387,000
96.0(CaCO3)
81%
Carthage operates an underground mine and has limestone production facilities located on approximately
800 acres that it owns containing high-quality limestone. In addition, Carthage has the right to mine the high-quality
limestone contained in approximately 760 adjacent acres pursuant to long-term mineral leases.
Mill Creek, which the Company acquired on February 9, 2022, operates an open pit quarry and production
facilities located on approximately 570 acres that it owns where it mines and processes industrial grade crushed
dolomite.
5
Colorado Lime acquired the Monarch Pass Quarry in November 1995 and has not carried out any mining on the
property. The Monarch Pass Quarry, which had been operated for many years until the early 1990s, contains a mixture of
limestone types, including high-quality calcium limestone and dolomite.
Internal Controls Over Limestone Mineral Resources and Reserves Estimates. Internal control procedures
followed by the Company’s Quality Control/Quality Assurance Laboratories (“QC/QA Lab”) and its contract geologists
when assessing properties for limestone mineral resources and reserves estimates are clearly defined. Core drilling is
conducted under the direct supervision of the geologists, and all core data is logged using a standard protocol. The
geologists are responsible for examining the core and compiling an interval list for X-Ray Florescence (“XRF”) analysis.
Splits of cores are bagged and labeled with the depth interval to be analyzed, with the remaining split boxed and stored
for reference. Bagged intervals are submitted to the Company’s certified QC/QA Lab for XRF analysis, with any
samples not destroyed by the testing process retained at the Company’s core storage facility. On an ongoing basis, the
QC/QA Labs analyze production samples for cutoff grade consistency with expectations used in the estimates for
limestone mineral resources and reserves.
When classifying limestone mineral resources and reserves, the Company’s contract geologists apply a fixed
cutoff grade and set parameters of geologic confidence to classify the respective resources and reserves. Company
management reviews the geologists’ assessments for reasonableness.
Quarrying and Mining. The Company extracts limestone by the open-pit method at its Texas, Batesville, Mill
Creek, and Love Hollow Quarries. The Monarch Pass Quarry is also an open-pit quarry but is not being mined at this
time. The open-pit method consists of removing any overburden comprising soil and other substances, including inferior
limestone, and then extracting the exposed high-quality limestone. The Company removes such overburden by utilizing
both its own employees and equipment and those of outside contractors. Open-pit mining is generally less expensive
than underground mining. The principal disadvantage of the open-pit method is that operations are subject to inclement
weather and overburden removal. The limestone is extracted by drilling and blasting, utilizing standard mining
equipment. At its St. Clair and Carthage underground mines, the Company mines limestone using room and pillar
mining. We have no knowledge of any recent changes in the physical quarrying or mining conditions on any of our
properties that have materially affected quarrying or mining operations.
Plants and Facilities. After extraction, limestone is crushed and screened and, in the case of PLS, ground and
dried, or, in the case of quicklime, processed in kilns. Quicklime may then be further processed in hydrators and slakers
to produce hydrated lime and lime slurry. The Company processes and distributes lime and/or limestone products at four
plants, six lime slurry facilities and three terminal facilities. All of its plants and facilities are accessible by paved roads,
and, in the case of the Arkansas Lime, St. Clair and Carthage plants and the terminal facilities, also by rail.
The Texas Lime plant has an annual capacity of approximately 470 thousand tons of quicklime from two
preheater rotary kilns. The plant also has PLS equipment, which, depending on the product mix, has the capacity to
produce approximately 800 thousand tons of PLS annually.
The Arkansas Lime plant is situated at the Batesville Quarry. Utilizing three preheater rotary kilns, this plant
has an annual capacity of approximately 630 thousand tons of quicklime. The Arkansas Lime plant is approximately
21 miles from the Love Hollow Quarry, to which it is connected by railroad. Arkansas Lime’s PLS and hydrating
facilities are situated on a tract of 290 acres located approximately two miles from the Batesville Quarry, to which it is
connected by a Company-owned railroad. The PLS equipment, depending on the product mix, has the capacity to
produce approximately 300 thousand tons of PLS annually.
The St. Clair plant has an annual capacity of approximately 250 thousand tons of quicklime from one vertical
kiln and one preheater rotary kiln. The plant also has PLS equipment, which has the capacity to produce approximately
150 thousand tons of PLS annually.
The Carthage plant has facilities located next to the mine that produce both aggregates and PLS. The
equipment has the capacity to produce approximately 900 thousand tons annually.
6
The Mill Creek plant has facilities located next to the mine that produces dolomitic PLS products. The
equipment has the capacity to produce approximately 300 thousand tons annually.
The Company also maintains lime hydrating and bagging equipment at the Texas, Arkansas and St. Clair plants.
Storage facilities for lime and limestone products at each plant consist primarily of cylindrical tanks, which are
considered by the Company to be adequate to protect its lime and limestone products and to provide an available supply
for customers’ needs at the expected volumes of shipments. Equipment is maintained at each plant to load trucks and, at
the Arkansas Lime, St. Clair, and Mill Creek plants, to load railroad cars.
Colorado Lime operates a limestone grinding and bagging facility with an annual capacity of approximately
125 thousand tons, located on approximately three and one-half acres of land in Delta, Colorado.
During 2022, the Company’s utilization rate was approximately 70% of its aggregate annual production
capacity for the plants in its Lime and Limestone Operations.
U.S. Lime Company (“US Lime”) uses quicklime to produce lime slurry and has four Houston area facilities,
including two distribution terminals connected to railroads, to serve the Greater Houston area construction market and
four facilities to serve the Dallas-Ft. Worth Metroplex. The Company established U.S. Lime Company-Transportation
(“Transportation”) to deliver some of the Company’s products to its customers and facilities primarily in Texas.
U.S. Lime Company - Shreveport operates a distribution terminal in Shreveport, Louisiana, which is connected
to a railroad, to provide lime storage, hydrating, slurrying and distribution capacity to service markets in Louisiana and
East Texas.
The Company believes that its plants and facilities are adequately maintained and insured.
Human Capital Resources. The Company is committed to attracting and retaining the best and brightest talent
to meet the current and future needs of its business. Attracting, retaining, motivating, and investing in the development
of human capital resources is a critical part of the Company’s commitment to environmental, social, and governance
(“ESG”) and sustainability issues.
At December 31, 2022, the Company employed 338 persons, 73 of whom were represented by unions. The
Company is a party to two collective bargaining agreements. The collective bargaining agreement for the Texas
facilities expires in November 2023. The collective bargaining agreement for the Carthage facilities expires in
May 2025. A collective bargaining agreement for the Arkansas facilities was set to expire in January 2023; however, in
November 2022, the Company received objective evidence that a majority of the bargaining unit employees at the
Arkansas facilities no longer supported union representation, and the Company, therefore, withdrew recognition from the
union. The withdrawal of recognition is pending a review in Region 15 of the National Labor Relations Board. Overall,
the Company believes that its employee relations are generally good.
Employee Retention and Incentivization. The Company has entered into an employment agreement with
Timothy W. Byrne, its President and Chief Executive Officer. Mr. Byrne’s employment agreement became effective as
of January 1, 2020 for a five-year term and will continue for successive one-year periods unless the Company or
Mr. Byrne gives at least one-year’s prior written notice of intent not to renew. Under the employment agreement, in
addition to the possibility of a discretionary cash bonus, Mr. Byrne is entitled each year to an EBITDA cash bonus
opportunity under the United States Lime & Minerals, Inc. Amended and Restated 2001 Long-Term Incentive Plan (the
“Plan”), and he is also entitled to grants of equity awards under the Plan.
Mr. Byrne’s employment agreement provides that Mr. Byrne is subject to certain forfeiture/clawback and share
ownership provisions designed to align Mr. Byrne’s financial interests with those of the Company’s long-term
shareholders, and to ensure that he is incentivized not to take actions that may benefit the Company and its shareholders
in the short-term at the expense of long-term corporate value creation and sustainability. In particular, in entering into
the employment agreement with Mr. Byrne, the Company’s Board of Directors and Compensation Committee were
sensitive to how Mr. Byrne’s leadership and actions could further the Company’s various objectives, including human
capital resources development and executive succession planning.
7
With respect to the Company’s broader employee base, certain employees are eligible to receive annual cash
bonuses based on discretionary determinations. Except in the case of Mr. Byrne, the Company has not adopted a formal
or informal annual bonus arrangement with pre-set performance goals. Rather, the determination to pay a cash bonus, if
any, is made in December each year based on the past performance of the individual and the Company or on the
attainment of non-quantified performance goals during the year. In either such case, the discretionary bonus may be
based on the specific accomplishments of the individual and/or on the overall performance of the Company. The
amounts of the discretionary bonuses for 2022 were based on each employee’s individual performance and
accomplishments, as well as those of the Company, including productivity, sales, controlling costs, and contributions
made to special projects.
In addition to cash bonuses, the Company makes equity awards to certain individuals under the Plan. The
Company uses equity awards granted under the Plan as a means to attract, retain, and motivate the Company’s directors,
officers, employees, and consultants. The Company views the use of equity awards under the Plan as an important
means of aligning the interests of its employees with those of its shareholders.
Employee Health and Safety. The Company believes that it is responsible to its employees to provide a safe and
healthy workplace environment. The Company seeks to accomplish this by: training employees in safe work practices;
openly communicating with employees; following safety standards and establishing and improving safe work practices;
involving employees in safety processes; and recording, reporting and investigating accidents, incidents and losses to
avoid reoccurrence. In response to the COVID-19 pandemic, the Company is continuing to focus on the health and safety
of its employees and other individuals at its facilities that produce lime and limestone products to the essential businesses
and communities that it serves.
Employee Development and Training. The Company encourages and supports the growth and development of
its employees. It advances continual learning and career development through ongoing performance and development
conversations or evaluations with employees and internally and externally developed training programs. The Company
also provides reimbursement for certain educational programs relating to the Company’s business.
Employee Diversity and Inclusion. The Company is committed to fostering a work environment that values and
promotes diversity and inclusion. This commitment includes providing equal access to, and participation in, equal
employment opportunities, programs, and services, without regard to a person’s gender, nationality, race, and ethnicity.
The Company is focused on the development and fair treatment of its employees, including equal employment hiring
practices and policies, anti-harassment, and anti-retaliation policies. The Company is continuing to invest in efforts to
create a more diverse and inclusive workforce and workplace environment.
Competition. The lime industry is highly regionalized and competitive, with price, quality, ability to meet
customer demands and specifications, proximity to customers, personal relationships and timeliness of deliveries being
the prime competitive factors. The Company’s competitors are predominantly private companies.
The lime industry is characterized by high barriers to entry, including: the scarcity of high-quality limestone
deposits on which the required zoning and permitting for extraction can be obtained; the need for lime plants and
facilities to be located close to markets, paved roads and railroad networks to enable cost-effective production and
distribution; clean air and anti-pollution regulations, including those related to greenhouse gas emissions, which make it
more difficult to obtain permitting for new sources of emissions, such as lime kilns; and the high capital cost of the
plants and facilities. These considerations reinforce the premium value of operations having permitted, long-term,
high-quality limestone resources and good locations and transportation relative to markets.
Lime producers tend to be concentrated on known high-quality limestone formations where competition takes
place principally on a regional basis. While the steel industry and environmental-related users are the largest market
sectors, the lime industry also counts chemical users and other industrial users, including paper manufacturers, oil and
gas services and highway, road and building contractors, among its major customers.
In recent years, the lime industry has experienced reduced demand from certain industries as they experience
cyclical or secular downturns. For example, demand from the Company’s steel and oil and gas services customers tends
to vary with the demand for their products and services, which has continued to be cyclical. In addition, utility plants are
8
continuing to use more natural gas and renewable sources for power generation instead of coal, with the permitting of
new coal-fired utility plants becoming extremely difficult, which reduces their demand for lime and limestone for flue
gas treatment processes. These reductions in demand have resulted in increased competitive pressures, including pricing
and competition for certain customer accounts, in the industry.
Consolidation in the lime industry has left the three largest companies accounting for more than two-thirds of
North American production capacity. In addition to the consolidations, and often in conjunction with them, many lime
producers have undergone modernization and expansion and development projects to upgrade their processing
equipment in an effort to improve operating efficiency. We believe that our modernization and expansion projects in
Texas, Arkansas, and Oklahoma and our recent acquisitions, along with our lime slurry operations in Texas, should
allow us to continue to remain competitive, protect our markets and position ourselves for the future. In addition, we will
continue to evaluate internal and external opportunities for expansion, growth and increased profitability, as conditions
warrant, or opportunities arise. We may have to revise our strategy or otherwise consider ways to enhance the value of
the Company, including by entering into strategic partnerships, mergers or other transactions.
Compliance with Government Regulations. The Company is subject to various federal, state, and local laws
and regulations that may materially impact the Company’s financial condition, results of operations, cash flows and
competitive position. These include laws and regulations relating to the environment, mine permitting and operations,
mine safety, and reclamation and remediation.
Environmental Laws. The Company owns or controls large areas of land on which it operates limestone
quarries, two underground mines, lime plants and other facilities with inherent environmental responsibilities,
compliance costs and liabilities. These include maintenance and operating costs for pollution control equipment, the cost
of ongoing monitoring and reporting programs, the cost of reclamation efforts and other similar environmental costs and
liabilities.
The Company’s operations are subject to various federal, state and local laws and regulations relating to the
environment, health and safety and other regulatory matters, including the Clean Air Act, the Clean Water Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability
Act and analogous state and local laws (“Environmental Laws”). These Environmental Laws grant the United States
Environmental Protection Agency (the “EPA”) and state governmental agencies the authority to promulgate and enforce
regulations that could result in substantial expenditures on pollution control, waste management, permitting compliance
activities, and mining reclamation. Many Environmental Laws also authorize private citizens and interest groups to file
lawsuits in court to enforce alleged violations. Changes in policy or political leadership may affect how Environmental
Laws are interpreted or enforced by the EPA and state governmental agencies. The failure to comply with
Environmental Laws may result in administrative and civil penalties, injunctive relief and criminal prosecution. The
Company has not been named as a potentially responsible party in any federal superfund cleanup site or state-led cleanup
site.
The rate of change of Environmental Laws continues to be rapid, and compliance can require significant
expenditures. Permits and other authorizations under Environmental Laws are required for the Company’s operations,
and such permits are subject to modification during the permit renewal process and, in very rare instances, could be
revoked.
The Clean Air Act and analogous state laws require us to obtain authorization to construct or modify existing
facilities, and the Company’s lime plants are subject to operating permits that have significant ongoing compliance costs.
Over time, the EPA has increased the stringency of the National Ambient Air Quality Standards (“NAAQS”), which are
used to establish air emission permitting limits under the Clean Air Act. The EPA has lowered ozone standards and
reclassified areas where State Implementation Plans (the “SIPs”) exist. In 2015, the EPA issued a final rule lowering the
ground-level ozone NAAQS to 70 parts per billion. In November 2022, the Dallas-Fort Worth nonattainment area,
which includes the Texas Lime facility, was re-designated as “severe nonattainment.” State environmental agencies in
the states in which the Company operates are currently in the process of revising their SIPs to comply with the new
ground-level ozone NAAQS and the redesignation of nonattainment areas. Most recently, in January 2023, EPA
announced its proposed decision to reduce the NAAQS for fine particulate matter.
9
These and similar rulemakings could increase the cost of future plant modifications or expansions, may make it
difficult or impossible to obtain new authorizations and permits for new facilities, may require the Company to purchase
emissions offsets as a condition of new authorizations and permits, and may increase compliance costs and have a
material adverse effect on the Company’s financial condition, results of operations, cash flows and competitive position.
In January 2023, under Section 112 of the Clean Air Act, EPA proposed amendments to the National Emission
Standards for Hazardous Air Pollutants (“NESHAPs”) for lime plants, which would revise the standards required to meet
the maximum achievable control technology (“MACT”) within the lime industry. This proposed rule would establish
stringent emission limitations for four hazardous air pollutants which will require additional pollution control equipment
at our lime kilns subject to the rule. While the proposed rule is currently undergoing public comment, it is uncertain
what limits the EPA will ultimately impose on the lime industry and what emission controls may be required by the final
MACT rule. It is probable, however, that the final rule will incorporate more stringent standards than existing standards,
which could require additional expenditures for designing, constructing, operating and maintaining pollution control
equipment necessary for compliance.
EPA regulations require large emitters of greenhouse gases, including the Company’s plants, to collect and
report greenhouse gas emissions data. The EPA has previously indicated that it will use the data collected through the
greenhouse gas reporting rules to decide whether to promulgate future greenhouse gas emission limits. The EPA and
delegated states also regulate greenhouse gas emissions under the New Source Review permitting and Federal Operating
Permit programs for facilities that are otherwise subject to permitting based on their emissions of conventional, non-
greenhouse gas pollutants. Thus, any new facilities or major modifications to existing facilities that exceed the federal
New Source Review emission thresholds for conventional pollutants may be required to use “best available control
technology” and energy efficiency measures to minimize greenhouse gas emissions.
Although the timing and impact of climate change legislation and of regulations limiting greenhouse gas
emissions are uncertain, the consequences of such legislation and regulation are potentially significant for the Company
because the production of CO2 is inherent in the manufacture of lime through the calcination of limestone and
combustion of fossil fuels. In February 2021, the current Administration rejoined the Paris Agreement. The Agreement
commits the United States to reduce greenhouse gas emissions by 26 to 28 percent below 2005 levels by 2025. Future
regulation related to the Paris Agreement or other greenhouse gas rulemakings could affect New Source Review
permitting or other permitting programs and, thereby, increase the time and costs of plant upgrades and expansions. The
passage of climate change legislation, and other regulatory initiatives by the Congress, the states or the EPA that restrict
or tax emissions of greenhouse gases, could also adversely affect the Company. There is no assurance that changes in
the law or regulations will not be adopted, such as the imposition of greenhouse gas emission limits, a carbon tax, a cap-
and-trade program requiring the Company to purchase carbon credits or other measures that would require reductions in
emissions or changes to raw materials, fuel use or production rates. Such changes, if adopted, could have a material
adverse effect on the Company’s financial condition, results of operations, cash flows and competitive position.
In addition to regulation, several court cases have been filed and decisions issued that may increase the risk of
claims being filed by third parties against companies for their greenhouse gas emissions. Such cases may seek to
challenge air permits, to force reductions in greenhouse gas emissions, or to recover damages for alleged climate change
impacts.
The Company also holds permits for process water and storm water discharges and must comply with the Clean
Water Act and analogous state laws and regulations. Any failure to comply with these permits could result in fines or
other penalties. Material changes to the terms of these permits or changes to regulations affecting water discharges in the
future could also increase compliance costs.
The manufacturing of lime and hydrated lime requires significant volumes of water. The Company operates
multiple groundwater wells to provide water to its plants. Groundwater pumping is subject to increased regulation, and
in some areas the Company is required to obtain permits from groundwater conservation districts to pump groundwater.
Any failure to comply with these permits could result in fines or other penalties and future changes that restrict the
quantities of groundwater that may be pumped may increase compliance costs.
10
The Company incurred capital expenditures related to environmental matters of $0.8 million, $0.5 million, and
$0.7 million in 2022, 2021, and 2020, respectively. The Company’s recurring costs associated with managing
environmental permitting and waste recycling and disposal (e.g., used oil and lubricants) and maintaining pollution
control equipment amounted to $0.4 million, $0.7 million and $0.5 million in 2022, 2021 and 2020, respectively.
Mine Safety. The Company’s mining operations are also subject to regulation under the Federal Mine Safety
and Health Act of 1977 (the “Mine Act”). The Mine Act has been construed as authorizing the Mine Safety and Health
Administration (“MSHA”) to issue citations and orders pursuant to the legal doctrine of strict liability, or liability
without fault. If, in the opinion of an MSHA inspector, a condition that violates the Mine Act or regulations
promulgated pursuant to it exists, then a citation or order will be issued regardless of whether the operator had any
knowledge of, or fault in, the existence of that condition. Many of the Mine Act standards include one or more
subjective elements, so that issuance of a citation or order often depends on the opinions or experience of the MSHA
inspector involved and the frequency and severity of citations and orders will vary from inspector to inspector.
Whenever MSHA believes that a violation of the Mine Act, any health or safety standard, or any regulation has
occurred, it may issue a citation or order which describes the violation and fixes a time within which the operator must
abate the violation. In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA
may issue an order requiring cessation of operations, or removal of miners from the area of the mine, affected by the
condition until the hazards are corrected. Whenever MSHA issues a citation or order, it has authority to propose a civil
penalty or fine, as a result of the violation, that the operator is ordered to pay.
Citations and orders can be contested before the Federal Mine Safety and Health Review Commission (the
“Commission”), and as part of that process, are often reduced in severity and amount, and are sometimes vacated. The
Commission is an independent adjudicative agency that provides administrative trial and appellate review of legal
disputes arising under the Mine Act. These cases may involve, among other questions, challenges by operators to
citations, orders and penalties they have received from MSHA, or complaints of discrimination by miners under section
105 of the Mine Act.
For further information, see Exhibit 95.1 to this Report on Form 10-K.
Reclamation and Remediation. The Company recognizes legal reclamation and remediation obligations
associated with the retirement of long-lived assets at their fair value at the time the obligations are incurred (“Asset
Retirement Obligations” or “AROs”). Some of the states the Company operates in have reclamation regulations to
properly reclaim the surface mines. These regulations require permitting with the respective state to ensure reclamation
obligations are met. Over time, the liability for AROs is recorded at its present value each period through accretion
expense, and the capitalized cost is amortized over the useful life of the related asset. Upon settlement of the liability, the
Company either settles the ARO for its recorded amount or recognizes a gain or loss. AROs are estimated based on
studies and the Company’s process knowledge and estimates and are discounted using an appropriate interest rate. The
AROs are adjusted when further information warrants an adjustment. The Company believes its accrual of $1.6 million
for AROs at December 31, 2022 is reasonable.
11
Map of United States Lime & Minerals, Inc. Lime and Limestone Operations.
Other.
The Company’s Other operations, consisting of its natural gas interests, are conducted through its wholly owned
subsidiary, U.S. Lime Company – O&G, LLC (“U.S. Lime – O&G”) and consist principally of a lease with respect to oil
and gas rights on the Cleburne, Texas property, located in the Barnett Shale Formation. Pursuant to the lease, U.S.
Lime – O&G has royalty interests ranging from 15.4% to 20% in oil and gas produced from any successful wells drilled
on the leased property and an option to participate in any well drilled on the leased property as a 20% non-operated
working interest owner. At December 31, 2022, the overall average interest under the oil and gas rights lease was 34.7%
on 33 producing wells.
U.S. Lime – O&G has also entered into a drillsite agreement with an operator that has an oil and gas lease
covering approximately 538 acres of land contiguous to our Johnson County, Texas property. Pursuant to the drillsite
agreement, U.S. Lime – O&G has a 3% royalty interest and a 12.5% non-operated working interest. At
December 31, 2022, U.S. Lime – O&G had a combined 12.4% royalty and non-operated working interest on 6 active
wells drilled on a padsite located on the Johnson County, Texas property.
No new wells have been completed since 2011, and there are no plans to drill additional wells under either the
oil and gas lease or the drillsite agreement. The carrying values of the long-lived assets related to the Company’s natural
gas interests were $0.9 million as of December 31, 2022.
12
ITEM 1A. RISK FACTORS.
Industry Risks
Our Lime and Limestone Operations are affected by general economic conditions in the United States and
specific economic conditions in particular industries.
General and industry specific economic conditions in the United States could lead to reduced demand for our
lime and limestone products. Specifically, demand from our utility customers has decreased due to the continuing trend
in the United States to retire coal-fired utility plants. Our steel and oil and gas services customers reduce their purchase
volumes, at times, due to cyclical economic conditions in their industries. Any overall reduction in demand for lime and
limestone products could result in increased competitive pressures, including pricing pressure and competition for certain
customer accounts, from other lime producers.
For us to maintain or increase our profitability, we must maintain or increase our revenues and improve cash
flows, manage our capital expenditures and control our operational and selling, general and administrative expenses. If
we are unable to maintain our revenues and control our costs in these uncertain economic and regulatory times, our
financial condition, results of operations, cash flows and competitive position could be materially adversely affected.
Our mining and other operations are subject to operating risks that are beyond our control, which could
result in materially increased operating expenses and decreased production and shipment levels that could materially
adversely affect our Lime and Limestone Operations and their profitability.
We mine limestone in open pit and underground mining operations and process and distribute that limestone
through our plants and other facilities. Certain factors beyond our control could disrupt our operations, adversely affect
production and shipments and increase our operating costs, all of which could have a material adverse effect on our
results of operations. These include geological formation problems that may cause poor mining conditions, variability of
chemical or physical properties of our limestone, an accident or other major incident at a site that may cause all or part of
our operations to cease for some period of time and increase our expenses, mining, processing and plant equipment
failures and unexpected maintenance problems that may cause disruptions and added expenses, strikes, job actions or
other work stoppages that may disrupt our operations or those of our suppliers, contractors or customers and increase our
expenses, and adverse weather conditions and natural disasters, such as hurricanes, tornadoes, heavy rains, flooding, ice
storms, freezing weather, drought and other natural events, that may affect operations, transportation or customers.
If any of these conditions or events occurs, our operations may be disrupted, we could experience a delay or halt
of production or shipments, our operating costs could increase significantly, and we could be exposed to fines, penalties,
assessments and other liabilities. If our insurance coverage is limited or excludes a given condition or event, we may not
be able to recover in full the losses that we may incur as a result of such conditions or events, some of which may be
substantial.
The lime and limestone industry is highly regionalized and competitive.
Our competitors are predominately large private companies. The primary competitive factors in the lime
industry are price, quality, ability to meet customer demands and specifications, proximity to customers, personal
relationships and timeliness of deliveries, with varying emphasis on these factors depending upon the specific product
application. To the extent that one or more of our competitors becomes more successful with respect to any key
competitive factor, we may find it difficult to increase or maintain our prices or to retain certain customer accounts, and
our financial condition, results of operations, cash flows and competitive position could be materially adversely affected.
13
Business and Financial Risks
In the normal course of our Lime and Limestone Operations, we face various business and financial risks,
including inflationary pressures, that could have a material adverse effect on our financial position, results of
operations, cash flows and competitive position. Not all risks are foreseeable or within our ability to control.
These risks arise from various factors, including, but not limited to, fluctuating demand and prices for our lime
and limestone products, including as a result of downturns in the economy and in the construction, industrial, steel and
oil and gas services industries, and reduced demand from coal-fired utility plants, increased competitive pressures from
other lime producers, changes in legislation and regulations, including Environmental Laws, health and safety
regulations and requirements to renew or obtain operating permits, our ability to produce and store quantities of lime and
limestone products sufficient in amount and quality to meet customer demands and specifications, the success of our
modernization, expansion and development and acquisition strategies, the uncertainty of our ability to sell our increased
production capacity at acceptable prices, our ability to execute our strategies and complete projects on time and within
budget, our ability to integrate, refurbish and/or improve acquired facilities, our access to capital, volatile costs,
especially energy costs, inclement weather and the effects of seasonal trends.
We receive most of our coal and petroleum coke by rail, so the availability of sufficient solid fuels to run our
plants could be diminished significantly in the event of major rail disruptions. Domestic coal and petroleum coke may
also be exported, which can increase competition and prices for the domestic supply. In addition, our freight costs to
deliver our lime and limestone products are high relative to the value of our products, and they have generally increased
in recent years. Our costs for delivery of solid fuels, as well as our products, also increase as demand for rail and
trucking by other industries increases, and changes to Department of Transportation rules and regulations can reduce the
availability of trucks, truck drivers and rail cars to deliver solid fuels to our plants and deliver our products to our
customers. Recent events, such as the ongoing conflict between Russia and Ukraine, and the sanctions and other actions
resulting therefrom, could further increase our energy costs. Additionally, recent railroad delivery issues have prevented
us from receiving contractual levels of coal and petroleum coke on a timely basis. If we are unable to continue to pass
along our increasing costs to customers through higher prices or surcharges, or unable to timely receive contracted
supplies of solid fuel to run our plants, our financial condition, results of operations, cash flows and competitive position
could be materially adversely affected.
We quote our lime and limestone products on a delivered price basis to certain customers, which requires us
to estimate future delivery costs. Our actual delivery costs may exceed these estimates, which would reduce our
profitability.
Delivery costs are impacted by the price of diesel. When diesel prices increase, we incur additional fuel
surcharges from freight companies that cannot be passed on to our customers that have been quoted a delivered price.
Material increases in the price of diesel could have a material adverse effect on the Company’s profitability.
To maintain our competitive position in the lime and limestone industry, we may need to continue to increase
the efficiency of our operations and expand production capacity, obtain financing for any such projects and
acquisitions at reasonable interest rates and acceptable terms and sell any resulting increased production at
acceptable prices.
We have in the past, and may in the future, undertake additional modernization and expansion and development
projects and acquisitions. Such projects and acquisitions may require that we incur substantial debt, which may not be
available to us at all or at reasonable interest rates or on acceptable terms. Given current and projected demand for lime
and limestone products, we cannot guarantee that any such project or acquisition would be successful, that we would be
able to sell any resulting increased production at acceptable prices or that any such sales would be profitable.
Although prices for our lime and limestone products have generally kept up with inflation, we have experienced
periods of pricing competition and pressures in recent years. We are unable to predict future demand and prices, given
the current economic and regulatory uncertainties in the United States economy as a whole and in particular industries,
and cannot provide any assurance that current levels of demand and prices will continue or that any future increases in
demand or prices can be maintained.
14
We may be limited in our ability to insure against certain risk of our operations.
Mining limestone and producing lime and limestone products involves risks which could result in damage to
our facilities, personal injury, and environmental damage. Although we maintain insurance in an amount that we
consider adequate, liabilities might exceed policy limits, in which event we could incur significant costs that could
adversely affect our financial position, results of operations, cash flows and competitive position. Additionally, the risks
inherent in mining limestone and the production of lime and limestone products may significantly increase the cost of
obtaining adequate insurance coverage, or make some coverage unavailable.
We may be adversely affected by any disruption in, or failure of, our information technology systems,
including due to cyber-security risks and incidents.
We rely upon the capacity, reliability and security of our information technology (“IT”) systems for our mining,
manufacturing, sales, financial and administrative functions. We also face the challenge of supporting our IT systems
and implementing upgrades when necessary, including the prompt detection and remediation of any cyber-security
breaches.
Our IT systems security measures are focused on the prevention, detection and remediation of damage from
computer viruses, natural disasters, unauthorized access, cyber-attack and other similar disruptions. However, our IT
systems protection measures may not be successful in preventing unauthorized access, intrusion and damage. Threats to
our systems can derive from human error, fraud or malice on the part of employees or third parties, ransomware, or
technological failure. Any failure, accident or security breach involving our IT systems could result in disruption to our
operations. A material breach in the security of our IT systems could negatively impact our mining and manufacturing
operations, sales or financial and administrative functions or result in the compromise of personal information of our
employees, customers or suppliers. To the extent any such failure, accident or security breach results in disruption to our
operations or sales or loss or disclosure of, or damage to, our data or confidential information, our costs could increase,
and our reputation, business, results of operations, competitive position, and financial condition could be materially
adversely affected. Additionally, should we experience a cyber-security event, we may incur substantial costs, including
remediation costs, such as liability for stolen assets or information, repairs of system damage, legal costs and costs
associated with regulatory actions.
COVID-19 Risks
Our financial condition, results of operations, cash flows, and competitive position could be materially
adversely impacted by pandemics, epidemics, or disease outbreaks, such as the COVID-19 pandemic.
Disruptions caused by pandemics, epidemics or disease outbreaks, such as COVID-19, could materially
adversely impact our financial condition, results of operations, cash flows, and competitive position. The
ongoing COVID-19 pandemic continues to impact our business, particularly as it relates to rising costs and supply chain
delays and disruptions, which may be amplified by new variants of the COVID-19 virus and governmental responses to
any outbreaks of infections. The extent to which the pandemic will continue to impact our business results and
operations remains uncertain considering the rapidly evolving environment, duration and severity of the spread
of COVID-19, and emerging variants.
The continued impact of COVID-19 may limit our ability to produce, sell and deliver our lime and limestone
products to our customers; cause key management and plant-level employees not to be available to us; result in mine and
plant shutdowns due to contagion, in which case we may not be able to shift production to our other mines and plants;
cause delays and disruptions to our supply chain as it relates to our suppliers, as well as delay and disrupt the supply
chains of our customers; impede our ability to maintain and repair our plants and equipment; negatively impact our
modernization, expansion, and development plans; negatively impact our ability to integrate acquisitions; as well as
adversely impact demand and prices for our lime and limestone products and increase our costs. Although we cannot
predict future developments, which are highly uncertain, including the scope and duration of the pandemic, and actions
taken by governmental authorities, including mandated vaccination programs, the COVID-19 pandemic could have a
material adverse effect on our financial condition, results of operations, cash flows and competitive position.
15
Governmental, Legal and Regulatory Risks
Our Lime and Limestone Operations are subject to general and industry specific regulations. Changes to the
regulatory environment could increase our cost of compliance and adversely impact our financial condition, results of
operations, cash flows and competitive position.
We are in a period of regulatory uncertainty, which has been heightened by the current divides in the branches
of the United States federal government. The Administration and Congress may initiate actions to increase regulation of
certain industries, including the lime industry, and may take other steps to restrict oil and gas drilling, reduce the use of
coal or regulate domestic manufacturing. There can be no assurance that any of these actions, if adopted, will not
increase the costs for our customers or increase the Company’s cost of compliance with Environmental Laws. In
addition, a variety of factors, including uncertainty with respect to governmental fiscal and budgetary constraints,
including the timing and amount of construction and infrastructure spending, changes to tax laws, legislative impasses,
extended government shutdowns, fallout from a potential U.S. government default on its obligations, pandemics, trade
wars, tariffs, social unrest, international incidents, and increased inflationary pressures and interest rates, could have a
material adverse effect on our financial condition, results of operations, cash flows and competitive position.
We incur environmental compliance costs and liabilities in our Lime and Limestone Operations, including
capital, maintenance and operating costs, with respect to pollution control equipment, the cost of ongoing monitoring
programs, the cost of reclamation and remediation efforts and other similar costs and liabilities relating to our
compliance with Environmental Laws. We expect these costs and liabilities to continue or increase, such as possible
new costs, taxes and limitations on operations, including regulation of greenhouse gas emissions. Similar
environmental costs and liabilities may also be faced by some of our customers.
The rate of change of Environmental Laws has been rapid over the last decade, and we may face possible new
uncertainties, costs and liabilities, taxes and limitations on operations, including those related to climate change
initiatives. Changes in policy or political leadership may affect how Environmental Laws are interpreted or enforced by
the EPA and state governmental agencies. The current Administration has signaled its intent to increase regulation under
Environmental Laws and has issued multiple executive orders reversing prior deregulation. We expect our expenditure
requirements for future environmental compliance, including complying with nitrogen dioxide, sulfur dioxide, ozone and
particulate matter emission under the NAAQS and regulation of greenhouse gas emissions, to continue or increase.
Discovery of currently unknown conditions and unforeseen costs and liabilities could require additional expenditures.
The regulation of greenhouse gas emissions remains an issue for us and some of our customers. In
February 2021, the current Administration rejoined the Paris Agreement, under which the United States committed to
reduce greenhouse gas emissions. There is no assurance that changes in the law or regulations will not be adopted, such
as the imposition of a carbon tax, a cap-and-trade program requiring companies to purchase carbon credits, the
imposition of greenhouse gas emission limits or other measures that would require reductions in emissions or changes to
raw materials, fuel use or production rates. These changes, if adopted, could have a material adverse effect on our
financial condition, results of operations, cash flows and competitive position.
More stringent regulation of greenhouse gas emissions could also adversely affect the competitiveness of some
of our customers, including coal-fired power plants, and indirectly the demand for our lime and limestone products. For
example, our utility customers are continuing to switch from coal to natural gas or renewable sources for power
generation for environmental and regulatory as well as cost reasons, thus reducing demand for our lime and limestone
products for flue gas treatment processes.
We intend to comply with all Environmental Laws and believe our accrual for environmental costs and
liabilities at December 31, 2022, is reasonable. Because many of the requirements are subjective and therefore not
quantifiable or presently determinable, or may be affected by additional legislation and rulemaking, including those
related to climate change and greenhouse gas emissions, there is no assurance that we will be able to successfully secure
new permits in connection with our future modernization and expansion and development projects, and it is not possible
to accurately predict the aggregate future costs and liabilities relating to environmental compliance and their effect on
our financial condition, results of operations, cash flows and competitive position.
16
Our lime and limestone operations are subject to various regulatory risks, including those relating to mine
safety, and reclamation and remediation obligations.
Our mining operations are subject to mine safety regulation under the Mine Act. The Mine Act has been
construed as authorizing MSHA to issue citations and orders pursuant to the legal doctrine of strict liability, or liability
without fault. Citations and orders can be contested before the Commission, and as part of that process, are often
reduced in severity and amount, and are sometimes vacated.
We also have legal reclamation and remediation obligations associated with the retirement of AROs. Over
time, the liability for AROs is recorded at its present value each period through accretion expense, and the capitalized
cost is amortized over the useful life of the related asset. Upon settlement of the liability, we either settle the ARO for its
recorded amount or recognize a gain or loss. We believe our accrual for AROs is reasonable, but there can be no
assurance that any amounts accrued will be sufficient to meet our reclamation and remediation obligations at any point in
time.
We intend to comply with all mining regulations and all of our reclamation and remediation obligations. If we
fail to comply with such regulations and obligations, such noncompliance may adversely impact our financial condition,
results of operations, cash flows and competitive position.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
Reference is made to Item 1 of this Report for a description of the properties of the Company, and such
description is hereby incorporated by reference in answer to this Item 2. As disclosed in Note 3 of Notes to Consolidated
Financial Statements, the Company’s plants and facilities and resources are subject to encumbrances to secure any
Company loans under its credit agreement.
ITEM 3. LEGAL PROCEEDINGS.
Information regarding any legal proceedings is set forth in Note 8 of Notes to Consolidated Financial
Statements and is hereby incorporated by reference in answer to this Item 3.
ITEM 4. MINE SAFETY DISCLOSURES.
Under Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of
Regulation S-K, each operator of a coal or other mine is required to include disclosures regarding certain mine safety
results in its periodic reports filed with the SEC. The operation of the Company’s quarries, underground mine and plants
is subject to regulation by MSHA. The required information regarding certain mining safety and health matters, broken
down by mining complex, for the year ended December 31, 2022 is presented in Exhibit 95.1 to this Report on
Form 10-K.
As discussed in Item 1 above, the Company believes it is responsible to employees to provide a safe and healthy
workplace environment. The Company seeks to accomplish this by: training employees in safe work practices; openly
communicating with employees; following safety standards and establishing and improving safe work practices;
involving employees in safety processes; and recording, reporting and investigating accidents, incidents and losses to
avoid reoccurrence.
Following passage of the Mine Improvement and New Emergency Response Act of 2006, MSHA significantly
increased the enforcement of mining safety and health standards on all aspects of mining operations. There has also been
an increase in the dollar penalties assessed for citations and orders issued in recent years.
17
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.
The Company’s common stock is listed on the Nasdaq Global Market® under the symbol “USLM.” As of
February 22, 2023, the Company had approximately 350 shareholders of record.
As of February 22, 2023, the Company had 500,000 shares of $5.00 par value preferred stock authorized;
however, none has been issued.
PERFORMANCE GRAPH
The graph below compares the cumulative 5-year total shareholders’ return on the Company’s common stock
with the cumulative total return on the NASDAQ Composite Index and a peer group index consisting of Eagle Materials,
Inc., Mineral Technologies, Inc., and Summit Materials Inc. The graph assumes that the value of the investment in the
Company’s common stock and each index was $100 on December 31, 2017, and that all cash dividends, including the
special cash dividend paid in the fourth quarter 2019, have been reinvested.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among U.S. Lime & Minerals, Inc., the NASDAQ Composite Index,
and a Peer Group
$250
$200
$150
$100
$50
$0
12/17
12/18
12/19
12/20
12/21
12/22
U.S. Lime & Minerals, Inc.
NASDAQ Composite
Peer Group
U.S. LIME & MINERALS, INC.
NASDAQ COMPOSITE INDEX
PEER GROUP
2017
100.00
100.00
100.00
2018
92.74
97.16
54.00
2019
125.27
132.81
80.14
2020
159.30
192.47
81.94
2021
181.12
235.15
133.30
2022
198.94
158.65
104.04
The Company’s Amended and Restated 2001 Long-Term Incentive Plan allows employees and directors to pay
the exercise price upon the exercise of stock options and the tax withholding liability upon exercise of stock options or
the lapse of restrictions on restricted stock by payment in cash and/or withholding or delivery of shares of the
Company’s common stock to the Company. Pursuant to these provisions, the Company repurchased 4,918 shares at a
price of $140.76 per share, the fair market value of one share on the date they were tendered to the Company, in the
fourth quarter 2022 for payment of tax withholding liability upon the lapse of restrictions on restricted stock.
18
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FORWARD-LOOKING STATEMENTS.
Any statements contained in this Report that are not statements of historical fact are forward-looking statements
as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this Report, including
without limitation statements relating to the Company’s plans, strategies, objectives, expectations, intentions, and
adequacy of resources, are identified by such words as “will,” “could,” “should,” “would,” “believe,” “possible,”
“potential,” “expect,” “intend,” “plan,” “schedule,” “estimate,” “anticipate” and “project.” The Company undertakes no
obligation to publicly update or revise any forward-looking statements. The Company cautions that forward-looking
statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including
without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject
to change at any time at the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by
its ability to maintain and increase its revenues and manage its growth; (iii) the Company’s ability to meet short-term and
long-term liquidity demands, including meeting the Company’s operating and capital needs, including possible
acquisitions and paying dividends, and conditions in the credit and equity markets, including the ability of the
Company’s customers to meet their obligations; (iv) interruptions to operations and increased expenses at the Company’s
facilities resulting from changes in mining methods or conditions, variability of chemical or physical properties of the
Company’s limestone and its impact on process equipment and product quality, inclement weather conditions, including
more severe and frequent weather events resulting from climate change, natural disasters, accidents, IT systems failures
or disruptions, including due to cyber-security incidents or ransomware attacks, utility disruptions, supply chain delays
and disruptions, labor shortages and disruptions, or regulatory requirements; (v) volatile coal, petroleum coke, diesel,
natural gas, electricity, and transportation costs and the consistent availability of trucks, truck drivers and rail cars to
deliver the Company’s products to its customers and solid fuels to its plants on a timely basis at competitive prices;
(vi) the Company’s ability to expand its lime and limestone operations through projects and acquisitions of businesses
with related or similar operations and the Company’s ability to obtain any required financing for such projects and
acquisitions, to integrate the projects and acquisitions into the Company’s overall operations, and to sell any resulting
increased production at acceptable prices; (vii) inadequate demand and/or prices for the Company’s lime and limestone
products due to increased competition from competitors, increasing competition for certain customer accounts,
conditions in the U.S. economy, recessionary pressures in, and the impact of government policies on, particular
industries, including oil and gas services, utility plants, steel, construction, and industrial, effects of governmental fiscal
and budgetary constraints, including the level of highway construction and infrastructure funding, changes to tax laws,
legislative impasses, extended governmental shutdowns, default on U.S. government obligations, trade wars, tariffs,
international incidents, including the Russian conflict with Ukraine, oil cartel production and supply actions, sanctions,
economic and regulatory uncertainties under state governments and the United States Administration and Congress,
inflation, Federal Reserve responses to inflationary concerns, including increased interest rates, and inability to continue
to maintain or increase prices for the Company’s products, including passing through the increased costs of energy,
transportation, labor, and services; (viii) ongoing and possible new regulations, investigations, enforcement actions and
costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and
limitations of operations, including those related to climate change, health and safety, human capital, diversity, and other
ESG and sustainability considerations, and those that could impact the Company’s ability to continue or renew its
operating permits or successfully secure new permits in connection with its modernization and expansion and
development projects; (ix) estimates of reserves and remaining lives of reserves; (x) the impact of future variants of the
novel coronavirus (“COVID-19”) or other potential global pandemics and governmental responses thereto, including
decreased demand, lower prices, tightened labor and other markets, and increased costs, and the risk of non-compliance
with health and safety protocols, social distancing and mask guidelines, and vaccination mandates, on the Company’s
financial condition, results of operations, cash flows, and competitive position; (xi) the impact of social or political
unrest; (xii) risks relating to mine safety and reclamation and remediation; and (xiii) other risks and uncertainties set
forth in this Report or indicated from time to time in the Company’s filings with the Securities and Exchange
Commission (the “SEC”), including the Company’s Quarterly Reports on Form 10-Q.
19
OVERVIEW.
Set forth below is certain selected financial data for the five years ended December 31, 2022:
2022
Years Ended December 31,
2020
(dollars in thousands, except per share amounts)
2019
2021
2018
Operating results
Lime and limestone revenues
Other revenues
Total revenues
Gross profit
Operating profit (1)
Income before income tax expense
Income tax expense
Net income
Net income per share of common stock:
Basic
Diluted
Dividends per share of common stock (2)
$ 233,421
2,729
$ 236,150
$ 70,342
$ 54,783
$ 56,562
$ 11,133
$ 45,429
$
$
$
8.01
8.00
0.80
187,365
1,890
189,255
59,260
46,417
46,518
9,473
37,045
997
159,707 156,981
1,296
160,704 158,277
41,676
47,587
29,246
33,869
30,900
34,072
4,844
5,849
26,056
28,223
6.55
6.54
0.64
5.01
5.00
0.64
4.64
4.64
5.89
141,922
2,513
144,435
30,486
20,002
21,568
1,883
19,685
3.52
3.51
0.54
(1) Operating profit for the years ended December 31, 2020 and 2019 was adversely impacted by impairment
charges of $1,550 and $930 to adjust the carrying value of the long-lived assets related to the Company’s
natural gas interests.
(2) Dividends per share of common stock for 2019 included a special dividend of $5.35 per share.
Total assets
Stockholders’ equity per outstanding common share
Employees
2022
$ 367,772
56.51
$
338
General.
As of December 31,
2020
2019
247,037 244,671
38.62
282
43.06
317
2021
279,098
49.10
308
2018
228,446
39.76
287
We have identified one reportable business segment based on the distinctness of our activities and products:
Lime and Limestone Operations. All operations are in the United States. Operating profit from our Lime and Limestone
Operations includes all of our selling, general and administrative costs. We do not allocate interest expense and interest
and other income to our Lime and Limestone Operations.
On July 1, 2020, we acquired Carthage, a limestone mining and production company located in Carthage,
Missouri, for $8.4 million cash. On February 9, 2022, we acquired Mill Creek, a dolomite mining and production
company located in Mill Creek, Oklahoma, for $5.6 million cash. We believe that these acquisitions will complement
our existing geographic footprint.
Our Other operations relate to our natural gas interests, consisting of royalty and non-operated working interests
under an oil and gas lease and a drillsite agreement with two separate operators related to our Johnson County, Texas
property, located in the Barnett Shale Formation, on which Texas Lime conducts its lime and limestone operations. In
the fourth quarter 2020, we recognized an impairment charge of $1.6 million ($1.2 million, net of tax) related to our
natural gas interests. The carrying values of the long-lived assets related to our natural gas interests were $0.9 million as
of December 31, 2022. Based on current production and pricing estimates, we believe that the carrying value of these
assets will be recoverable in future periods.
Our revenues increased 24.8% in 2022 compared to 2021. Revenues from our Lime and Limestone Operations
increased 24.6% in 2022, compared to 2021, primarily due to increased demand from our construction, oil and gas
services, and steel customers. Revenues in 2022 were also favorably impacted by an increase in average selling prices
for our lime and limestone products of 10.6%.
20
Our gross profit increased 18.7% in 2022 compared to 2021. Gross profit from our Lime and Limestone
Operations in 2022 increased 17.6%, compared to 2021, primarily due to the increased revenues discussed above,
partially offset by increased lime and limestone production costs, principally from higher transportation, energy, labor,
and supplies costs.
Our net income increased $8.4 million, or 22.6%, in 2022, compared to 2021. Net income per fully diluted
share increased to $8.00 in 2022, compared to $6.54 in 2021.
Cash flows from operations enabled us to make $32.4 million of capital investments in 2022, including the
acquisition of Mill Creek. It also enabled us to pay $4.5 million in dividends in 2022 and increase our cash balances to
$133.3 million as of December 31, 2022, compared to $105.4 million as of December 31, 2021. As of
December 31, 2022 and 2021, we had no debt outstanding.
Absent a significant acquisition opportunity arising during 2023, we anticipate funding our operating and
capital needs, and our quarterly cash dividend from our cash balances on hand and cash flows from operations.
Lime and Limestone Operations.
In our Lime and Limestone Operations, we produce and sell PLS, aggregate, quicklime, hydrated lime and lime
slurry. The principal factors affecting our success are the level of demand and prices for our products and whether we are
able to maintain sufficient production levels and product quality while controlling costs.
Inclement weather conditions, such as winter ice and snow storms, cold weather, hurricanes, tornadoes and
excessive rainfalls generally reduce the demand for lime and limestone products supplied to construction-related
customers that account for a significant amount of our revenues. Inclement weather also interferes with our open-pit
mining operations and can disrupt our plant production. In addition to weather, various maintenance, environmental,
accident and other operational and construction issues can also disrupt our operations and increase our operating
expenses.
Demand for our lime and limestone products in our market areas is also affected by general economic
conditions, the pace of construction, the demand for steel, the level of oil and gas drilling in our markets, the level of
governmental and private funding for highway construction and infrastructure, and utility plant usage of coal for power
generation. Demand for our lime and limestone products from our construction, oil and gas services, and steel customers
increased in 2022.
In 2022, we experienced rising costs, especially transportation, energy, labor, and supplies costs, and supply
chain delays and disruptions as the global economy came out of restrictions related to the COVID-19 pandemic. We
continue to monitor and assess the impact of the COVID-19 pandemic, including the emergence of new variants of the
virus, implementation of new or enhanced pandemic-related restrictions, and the possibility of additional wide-spread or
localized outbreaks of infections, any of which could have an adverse effect on our financial condition, results of
operations, cash flows and competitive position.
In 2014 and 2015, Texas approved two constitutional amendments authorizing a portion of oil and gas tax
revenues to be deposited into the State Highway Fund, for certain other sales and use tax revenues to be directed to the
State Highway Fund and, beginning in Texas’ fiscal 2020, for certain state motor vehicle sales and rental tax revenues to
be directed to the State Highway Fund. In its fiscal 2022, Texas transferred approximately $4.5 billion of such tax
revenues to the State Highway Fund from these two amendments, with almost $23 billion transferred since 2015. In
2021, the United States Congress passed the Infrastructure Investment and Jobs Act, which is estimated to apportion
approximately $26.9 billion to Texas for federal-aid highway programs, of which $5.2 billion was for Texas’ fiscal 2022
and the remainder is estimated for fiscal 2023 through fiscal 2026. With these funding sources, we would expect to see
strong continued demand from our construction customers, but the timing and amount of any increase in demand is
uncertain and subject to weather, political, and other factors.
Our modernization and expansion and development projects and acquisitions in Texas, Arkansas, Oklahoma
and Missouri and our Texas slurry operations have positioned us to meet the demand for high-quality lime and limestone
products in our markets. Our modernization and expansion and development projects have also equipped us with
21
up-to-date, fuel-efficient plant facilities, which have resulted in lower production costs and greater operating efficiencies,
thus enhancing our competitive position. All of our rotary kilns are now fuel-efficient preheater kilns. The addition of
the vertical kiln at St. Clair in 2019 further increased the fuel efficiency of our fleet of kilns.
For our plants to operate at peak efficiency, we must meet operational challenges that arise from time to time,
including bringing new facilities on-line and refurbishing and/or improving acquired facilities, including the facilities
acquired as a result of our recent acquisitions of Carthage and Mill Creek, as well as operating existing facilities
efficiently. We also incur ongoing costs for maintenance and to remain in compliance with rapidly changing
Environmental Laws and health and safety and other regulations.
Our primary variable cost is energy. Prices for coal, petroleum coke, diesel, natural gas, electricity,
transportation and freight are volatile, and our energy costs increased substantially in 2022. In addition, our freight costs,
including the cost of diesel, to deliver our products can be high relative to the value of our products.
Historically, we have been able to mitigate to some degree the impact of volatile energy costs by varying the
mixes of fuel used in our kilns, and by passing on some of any increase in costs to our customers, where possible,
through higher prices and/or surcharges on certain products. In addition, as noted above, we put a more fuel-efficient
kiln in service at St. Clair, and we continually look for other ways to better manage our energy costs at our plants.
Finally, we have not engaged in any significant hedging activity in an effort to control our energy costs but may do so in
the future.
We have financed our modernization and expansion and development projects and acquisitions through a
combination of debt financing, which has now been repaid, and cash flows from operations. We must generate sufficient
cash flows to cover ongoing capital requirements, including current and possible future modernization and expansion and
development projects and acquisitions, or borrow sufficient funds to finance any shortfall in our liquidity needs.
We continue to believe the enhanced efficiency and production capacity resulting from our modernization and
expansion and development projects in Texas, Arkansas, and Oklahoma, our expanded slurry operations, our
acquisitions, including the recent acquisitions of Carthage and Mill Creek, and the operational strategies we have
implemented have allowed us to increase our efficiency, grow production capacity, improve product quality, better serve
existing customers, attract new customers and control costs. However, there can be no assurance that demand and prices
for our lime and limestone products will enable us to fully utilize our additional production capacity, nor that our
production will not be adversely affected by weather, maintenance, environmental, accident, cyber-security and other
operational and construction issues; that we can successfully invest in improvements to our existing facilities and
acquisitions; that our results will not be adversely affected by increases in fuel, natural gas, electricity, transportation and
freight costs, taxes or new environmental, health and safety or other regulatory requirements; or that, with increasing
competition with other lime and limestone producers, our revenues, gross profit, net income and cash flows can be
maintained or improved.
Other.
Revenues in 2022 included $2.7 million from our natural gas interests, compared to $1.9 million in 2021. Gross
profit in 2022 included $1.4 million from our natural gas interests, compared to $0.6 million in 2021.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES.
The discussion and analysis of our financial condition and results of operations are based upon our consolidated
financial statements, which have been prepared in accordance with accounting principles generally accepted in the
United States of America (“US GAAP”). The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of
contingent assets and liabilities, at the date of our financial statements. Actual results may differ from these estimates and
judgments under different assumptions or conditions and historical trends.
Critical accounting policies are defined as those that are reflective of significant management judgments and
uncertainties and potentially result in materially different results under different assumptions and conditions. We believe
22
the following critical accounting policies require the most significant management estimates and judgments used in the
preparation of our consolidated financial statements.
Contingencies. We are party to proceedings, lawsuits and claims arising in the normal course of business
relating to regulatory, labor, product and other matters. We are required to estimate the likelihood of any adverse
judgments or outcomes with respect to these matters, as well as potential ranges of possible losses. A determination of
the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual matter,
including coverage under our insurance policies. This determination may change in the future because of new
information or developments.
Income taxes. We utilize the asset and liability approach in reporting our 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. We establish valuation allowances 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. We also assess individual tax positions to determine if they meet the
criteria for some or all of the benefits of that position to be recognized in our financial statements and only recognize tax
positions that meet the more-likely-than-not recognition threshold.
Environmental costs and liabilities. We record environmental accruals, including accrued reclamation costs,
in other liabilities, based on studies and estimates, when it is probable we have incurred a reasonably estimable cost or
liability. The accruals are adjusted when further information warrants an adjustment. Environmental expenditures that
extend the life, increase the capacity or improve the safety or efficiency of Company-owned assets or are incurred to
mitigate or prevent future possible environmental issues are capitalized. Other environmental costs are expensed when
incurred.
23
RESULTS OF OPERATIONS.
The following table sets forth certain financial information expressed as a percentage of revenues for the three
years ended December 31, 2022:
Lime and limestone revenues
Other revenues
Total revenues
Cost of revenues
Labor and other operating expenses
Depreciation, depletion and amortization
Gross profit
Selling, general and administrative expenses
Impairment of long-lived assets
Operating profit
Other (expense) income:
Interest expense
Interest and other income, net
Income tax expense
Net income
2022
Year Ended December 31,
2021
99.0 %
1.0
100.0
98.8 %
1.2
100.0
2020
99.4 %
0.6
100.0
(60.9)
(9.3)
29.8
(6.6)
—
23.2
(57.8)
(10.9)
31.3
(6.8)
—
24.5
(58.3)
(12.1)
29.6
(7.6)
(1.0)
21.1
(0.1)
0.8
(4.7)
19.2 %
(0.1)
0.2
(5.0)
19.6 %
(0.2)
0.3
(3.6)
17.6 %
2022 vs. 2021
Our revenues for 2022 increased to $236.2 million from $189.3 million in 2021, an increase of $46.9 million, or
24.8%. Revenues from our Lime and Limestone Operations in 2022 increased $46.1 million, or 24.6%, to $233.4 million
from $187.4 million in 2021. The increase in revenues from our Lime and Limestone Operations was primarily due to a
14.0% increase in sales volumes of our lime and limestone products, principally to our construction, oil and gas services,
and steel customers. In addition, we realized a 10.6% average increase in prices for our lime and limestone products in
2022, compared to 2021. Other revenues included $2.7 million and $1.9 million in 2022 and 2021, respectively, from
our natural gas interests.
Our gross profit increased to $70.3 million for 2022 from $59.3 million for 2021, an increase of $11.1million,
or 18.7%. Gross profit from our Lime and Limestone Operations for 2022 was $69.0 million, compared to $58.7 million
in 2021, an increase of $10.3 million, or 17.6%. The increase in gross profit in 2022, compared to 2021, resulted
primarily from the increased revenues discussed above, partially offset by increased lime and limestone production costs,
principally from higher transportation, energy, labor, and supplies costs. Gross profit also included $1.4 million and
$0.6 million in 2022 and 2021, respectively, from our natural gas interests.
Selling, general and administrative expenses (“SG&A”) increased to $15.6 million for 2022, an increase of
$2.7 million, or 21.1%, compared to $12.8 million for 2021. As a percentage of revenues, SG&A was 6.6% in 2022,
compared to 6.8% in 2021. The increase in SG&A was primarily due to increased personnel expenses in 2022,
compared to 2021.
Interest expense was $0.3 million in 2022 and 2021. We had no outstanding debt during either 2022 or 2021.
Interest and other income, net was $2.0 million in 2022, compared to $0.4 million in 2021, an increase of
$1.7 million, or 479.2%. The increase in interest and other income, net in 2022 compared to 2021 was due to higher
interest rates on higher average balances in our cash and cash equivalents.
24
Income tax expense was $11.1 million in 2022, for an effective rate of 19.7%, compared to $9.5 million in
2021, for an effective rate of 20.4%, an increase of $1.7 million, primarily due to the increase in income before taxes in
2022, compared to 2021. Our effective income tax rates for 2022 and 2021 were reduced from the statutory rate
primarily due to statutory depletion in excess of cost depletion.
Net income increased to $45.4 million ($8.00 per share diluted) in 2022, compared to $37.0 million ($6.54 per
share diluted) in 2021, an increase of $8.4 million, or 22.6%.
2021 vs. 2020
Our revenues for 2021 increased to $189.3 million from $160.7 million in 2020, an increase of $28.6 million, or
17.8%. Revenues from our Lime and Limestone Operations in 2021 increased $27.7 million, or 17.3%, to $187.4 million
from $159.7 million in 2020. The increase in revenues from our Lime and Limestone Operations was primarily due to a
16.4% increase in sales volumes of our lime and limestone products principally to our construction, steel, environmental,
industrial, roofing, and agriculture customers. In 2020, the COVID-19 pandemic and related restrictions on business
activities resulted in a general economic slowdown, which disproportionately impacted certain industries that purchase
our lime and limestone products. In addition, we realized a 0.9% average increase in prices for our lime and limestone
products in 2021, compared to 2020. Other revenues included $1.9 million and $1.0 million in 2021 and 2020,
respectively, from our natural gas interests.
Our gross profit increased to $59.3 million for 2021 from $47.6 million for 2020, an increase of $11.7 million,
or 24.5%. Gross profit from our Lime and Limestone Operations for 2021 was $58.7 million, compared to $48.0 million
in 2020, an increase of $10.7 million, or 22.2%. The increase in gross profit in 2021, compared to 2020, resulted
primarily from the increased revenues discussed above and increased operating efficiencies, partially offset by higher
energy costs. Gross profit also included a $0.6 million profit in 2021 and a $(0.4) million loss in 2020 from our natural
gas interests.
SG&A increased to $12.8 million for 2021, an increase of $0.7 million, or 5.5%, compared to $12.2 million for
2020. As a percentage of revenues, SG&A was 6.8% in 2021, compared to 7.6% in 2020. The increase in SG&A was
primarily due to increased personnel expenses in 2021, compared to 2020.
In the fourth quarter 2020, we recognized an impairment charge of $1.6 million ($1.2 million, net of tax) to
adjust the carrying values of the long-lived assets related to our natural gas interests. At December 31, 2021, the long-
lived assets related to our natural gas interests had a carrying value of $1.5 million.
Interest expense was $0.3 million in 2021, compared to $0.2 million in 2020. We had no outstanding debt
during either 2021 or 2020.
Interest and other income, net was $0.4 million in 2021, compared to $0.5 million in 2020.
Income tax expense was $9.5 million in 2021, for an effective rate of 20.4%, compared to $5.8 million in 2020,
for an effective rate of 17.2%, an increase of $3.6 million, primarily due to the increase in income before taxes in 2021,
compared to 2020. Our effective income tax rates for 2021 and 2020 were reduced from the statutory rate primarily due
to statutory depletion in excess of cost depletion.
Net income increased to $37.0 million ($6.54 per share diluted) in 2021, compared to $28.2 million ($5.00 per
share diluted) in 2020, an increase of $8.8 million, or 31.3%.
25
Summary of Quarterly Financial Data
(dollars in thousands except per share amounts)
Revenues
Lime and limestone operations
Other
Gross profit
Lime and limestone operations
Other
Net income
Basic income per common share
Diluted income per common share
Revenues
Lime and limestone operations
Other
Gross profit
Lime and limestone operations
Other
Net income
Basic income per common share
Diluted income per common share
FINANCIAL CONDITION.
2022
March 31, June 30, September 30, December 31,
$ 50,296
613
$ 50,909
$ 59,613 $
879
$ 60,492 $
65,699 $
758
66,457 $
$ 14,197
270
$ 14,467
$ 15,975 $
506
$ 16,481 $
22,166 $
424
22,590 $
$ 8,668
1.53
$
1.53
$
$ 10,238 $
1.80 $
$
1.80 $
$
15,726 $
2.77 $
2.77 $
57,813
479
58,292
16,613
191
16,804
10,797
1.90
1.90
2021
March 31, June 30, September 30, December 31,
$ 41,356
318
$ 41,674
$ 48,742 $
420
$ 49,162 $
51,749 $
562
52,311 $
$ 11,804
1
$ 11,805
$ 16,682 $
113
$ 16,795 $
17,128 $
213
17,341 $
$ 7,031
1.24
$
1.24
$
$ 11,093 $
1.96 $
$
1.96 $
$
11,308 $
2.00 $
1.99 $
45,518
590
46,108
13,017
302
13,319
7,613
1.35
1.34
Capital Requirements. We require capital primarily for normal recurring capital and re-equipping projects,
modernization and expansion and development projects and acquisitions. Our capital needs are expected to be met
principally from cash on hand, cash flows from operations and our $75.0 million revolving credit facility.
We expect to spend approximately $20.0 million per year over the next several years in our Lime and
Limestone Operations for normal recurring capital and re-equipping projects at our plants and facilities to maintain or
improve efficiency, ensure compliance with Environmental Laws, meet customer needs and reduce costs. As of
December 31, 2022, we had $1.5 million in open orders for equipment and construction contracts for our Lime and
Limestone Operations.
Liquidity and Capital Resources. Net cash provided by operating activities was $64.4 million in 2022,
compared to $55.7 million in 2021, an increase of $8.7 million, or 15.6%. Our net cash provided by operating activities
is composed of net income, depreciation, depletion and amortization (“DD&A”), other non-cash items included in net
income and changes in working capital. In 2022, net cash provided by operating activities was principally composed of
$45.4 million net income, $22.2 million DD&A, $2.5 million increase in deferred income taxes, and $2.6 million stock-
based compensation, partially offset by an $8.1 million decrease from changes in working capital. In 2022, the changes
in working capital were principally composed of a $6.4 million increase in trade receivables, net, primarily as a result of
increased sales in the fourth quarter 2022, compared to the fourth quarter 2021, a $4.3 million increase in inventories,
primarily due to increases in the cost and volume of our solid fuel stockpiles and our supply of critical parts, partially
26
offset by a $2.8 million increase in accounts payable, accrued expenses and other liabilities. In 2021, net cash provided
by operating activities was principally composed of $37.0 million net income, $20.9 million DD&A, $1.5 million
increase in deferred income taxes, $2.2 million stock-based compensation, partially offset by a $6.0 million decrease
from changes in working capital. In 2021, the changes in working capital were principally composed of a $3.7 million
increase in trade receivables, net, primarily as a result of increased sales in the fourth quarter 2021, compared to the
fourth quarter 2020, a $1.4 million decrease in accounts payable, accrued expense and other liabilities, and a $1.0 million
increase in prepaid expenses and other assets.
Net cash used in investing activities was $31.2 million for 2022, compared to $29.6 million for 2021. Net cash
used in investing activities for 2022 included $5.6 million for the acquisition of Mill Creek and an additional
$3.5 million capital investments in the Mill Creek facility, $4.1 million for real property purchases, and $3.0 million for
development of the Love Hollow Quarry and its connection to the Batesville plant. During 2022, we experienced
increased costs associated with our normal recurring capital and re-equipping projects at our plants and facilities, as part
of the current overall inflationary environment. We expect that the increase in these capital costs will result in increased
DD&A expense in future periods. Net cash used in investing activities in 2021 included $14.0 million for the
development of the Love Hollow Quarry and its connection to the Batesville plant and $2.3 million for other real
property purchases. The balance of net cash used in investing activities in 2022 and 2021 was primarily for normal
recurring capital and re-equipping projects at our plants and facilities.
Net cash used in financing activities primarily consisted of $4.5 million for dividend payments and $0.8 million
to repurchase shares of our common stock in 2022, compared to $3.6 million for dividend payments and $0.7 million to
repurchase shares of our common stock in 2021.
Our cash and cash equivalents at December 31, 2022 increased to $133.4 million from $105.4 million at
December 31, 2021.
Banking Facilities and Debt. Our credit agreement with Wells Fargo Bank, N.A. (the “Lender”), as amended
as of May 2, 2019 and November 21, 2019, provides for a $75 million revolving credit facility (the “Revolving Facility”)
and an incremental four-year accordion feature to borrow up to an additional $50 million on the same terms, subject to
approval by the Lender or another lender selected by us. The credit agreement also provides for a $10 million letter of
credit sublimit under the Revolving Facility. The Revolving Facility and any incremental loans mature on May 2, 2024.
Interest rates on the Revolving Facility are, at our option, LIBOR plus a margin of 1.000% to 2.000%, or the
Lender’s Prime Rate plus a margin of 0.000% to 1.000%; and a commitment fee range of 0.200% to 0.350% on the
undrawn portion of the Revolving Facility. The Revolving Facility interest rate margins and commitment fee are
determined quarterly in accordance with a pricing grid based upon our Cash Flow Leverage Ratio, defined as the ratio of
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. Our maximum Cash Flow Leverage
Ratio is 3.50 to 1.
We may pay dividends so long as we remain in compliance with the provisions of our credit agreement, and
may purchase, redeem or otherwise acquire shares of our common stock so long as our 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.
We had no debt outstanding as of December 31, 2022 or 2021. We had $0.3 million of letters of credit issued
under the Revolving Facility as of December 31, 2022, which count as draws against the available commitment under the
Revolving Facility.
27
Common Stock Buybacks. We spent $0.8 million, $0.7 million and $0.6 million in 2022, 2021 and 2020,
respectively, to repurchase treasury shares tendered for payment of the exercise price for stock options and the tax
withholding liability upon the lapse of restrictions on restricted stock.
Contractual Obligations. The following table sets forth our contractual obligations as of December 31, 2022
(in thousands):
Payments Due by Period
Contractual Obligations
Debt
Operating leases(1)
Limestone mineral leases
Purchase obligations(2)(3)
Other liabilities
Total
Total
1 Year
—
$
5,842
$
$
2,418
$ 22,397
1,556
$
$ 32,213
—
1,408
97
21,719
120
23,344
2 - 3 Years
—
2,436
195
678
248
3,557
4 - 5 Years
More Than
5 Years
—
249
1,824
—
943
3,016
—
1,749
302
—
245
2,296
(1) Represents operating leases for railcars, corporate office space and some equipment that are either non-cancelable or
subject to significant penalty upon cancellation.
(2) Of these obligations, $1,079 were recorded on the Consolidated Balance Sheet at December 31, 2022.
(3) Purchase obligations includes enforceable agreements to purchase goods or services that specify all significant
terms, including fixed or minimum quantities to be purchased, generally pertaining to fuel contracts, fixed-price
provisions, and the approximate timing of the transaction, and are either non-cancelable or subject to significant
penalty upon cancellation.
Absent a significant acquisition, we believe that cash on hand and cash flows from operations will be sufficient
to meet our operating needs, ongoing capital needs, including our current and possible future modernization and
expansion and development projects, and liquidity needs and allow us to pay our regular cash dividends for the near
future.
Off-Balance Sheet Arrangements. We do not utilize off-balance sheet financing arrangements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
INTEREST RATE RISK.
We could be exposed to changes in interest rates, primarily as a result of floating interest rates on the Revolving
Facility. There was no outstanding balance on the Revolving Facility subject to interest rate risk at December 31, 2022.
Any future borrowings under the Revolving Facility would be subject to interest rate risk.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Index to Consolidated Financial Statements.
Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248)
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2022 and 2021
Consolidated Statements of Income for the Years Ended December 31, 2022, 2021 and 2020
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021 and 2020
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2022, 2021 and 2020
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020
Notes to Consolidated Financial Statements
29
33
34
35
36
37
38
28
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
United States Lime & Minerals, Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of United States Lime &
Minerals, Inc. (a Texas corporation) and subsidiaries (the “Company”) as of
December 31, 2022 and 2021, the related consolidated statements of income,
comprehensive income, stockholders’ equity, and cash flows for each of the three years
in the period ended December 31, 2022, and the related notes (collectively referred to as
the “financial statements”). In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2022 and
2021, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2022, in conformity with accounting principles generally
accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control
over financial reporting as of December 31, 2022, based on criteria established in the
2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”), and our report dated
February 23, 2023 expressed an unqualified opinion.
Basis for opinion
These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on the Company’s financial statements based on
our audits. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error
or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our
audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
29
Critical audit matters
Critical audit matters are matters arising from the current period audit of the financial
statements that were communicated or required to be communicated to the audit
committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex
judgments. We determined that there are no critical audit matters.
/s/ GRANT THORNTON LLP
We have served as the Company’s auditor since 2005.
Dallas, Texas
February 23, 2023
30
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
United States Lime & Minerals, Inc.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of United States Lime &
Minerals, Inc. (a Texas corporation) and subsidiaries (the “Company”) as of
December 31, 2022, based on criteria established in the 2013 Internal Control—
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”). In our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of December 31,
2022, based on criteria established in the 2013 Internal Control—Integrated Framework
issued by COSO.
We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial
statements of the Company as of and for the year ended December 31, 2022, and our
report dated February 23, 2023 expressed an unqualified opinion on those financial
statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal control over
financial reporting, included in the accompanying Management’s Report on Internal
Control over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public
accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and performing such
other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
31
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
/s/ GRANT THORNTON LLP
Dallas, Texas
February 23, 2023
32
United States Lime & Minerals, Inc.
Consolidated Balance Sheets
(dollars in thousands, except share and per share amounts)
ASSETS
Current assets
Cash and cash equivalents
Trade receivables, net
Inventories, net
Prepaid expenses and other current assets
Total current assets
Property, plant and equipment
Mineral reserves and land
Proved natural gas properties, successful-efforts method
Buildings and building and leasehold improvements
Machinery and equipment
Furniture and fixtures
Automotive equipment
Property, plant and equipment
Less accumulated depreciation and depletion
Property, plant and equipment, net
Operating lease right-of-use assets
Other assets, net
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
Current portion of operating lease liabilities
Accrued expenses
Total current liabilities
Deferred tax liabilities, net
Operating lease liabilities, excluding current portion
Other liabilities
Total liabilities
Stockholders’ equity
Preferred stock, $5.00 par value; authorized 500,000 shares; none issued or
outstanding
Common stock, $0.10 par value; authorized 30,000,000 shares; 6,703,166 and
6,681,469 shares issued at December 31, 2022 and 2021, respectively
Additional paid-in capital
Retained earnings
Less treasury stock, 1,021,087 and 1,015,457 shares at December 31, 2022 and
2021, respectively, at cost
Total stockholders’ equity
Total liabilities and stockholders’ equity
December 31,
2022
December 31,
2021
$
$
$
133,384 $
33,592
19,579
3,435
189,990
105,355
26,715
15,116
3,244
150,430
48,586
15,934
9,588
359,123
1,312
7,054
441,597
(269,627)
171,970
5,372
440
367,772 $
40,534
15,934
7,856
342,120
1,173
5,944
413,561
(251,389)
162,172
3,144
450
316,196
7,725 $
1,411
6,401
15,537
25,582
4,129
1,436
46,684
5,433
899
4,856
11,188
23,055
2,311
1,436
37,990
—
—
671
34,528
342,504
669
31,774
301,611
(56,615)
321,088
367,772 $
(55,848)
278,206
316,196
$
The accompanying notes are an integral part of these consolidated financial statements.
33
United States Lime & Minerals, Inc.
Consolidated Statements of Income
(dollars in thousands, except per share amounts)
2022
236,150
Years Ended December 31,
2021
189,255 $
$
Revenues
Cost of revenues
Labor and other operating expenses
Depreciation, depletion and amortization
Gross profit
Selling, general and administrative expenses
Impairment of long-lived assets
Operating profit
Other expense (income)
Interest expense
Interest and other income, net
Income before income tax expense
Income tax expense
Net income
Net income per share of common stock
Basic
Diluted
$
$
$
$
143,887
21,921
165,808
70,342
15,559
—
54,783
254
(2,033)
(1,779)
56,562
11,133
45,429
8.01
8.00
$
$
$
2020
160,704
93,738
19,379
113,117
47,587
12,168
1,550
33,869
248
(451)
(203)
34,072
5,849
28,223
109,365
20,630
129,995
59,260
12,843
—
46,417
250
(351)
(101)
46,518
9,473
37,045 $
6.55 $
6.54 $
5.01
5.00
The accompanying notes are an integral part of these consolidated financial statements.
34
United States Lime & Minerals, Inc.
Consolidated Statements of Comprehensive Income
(dollars in thousands)
Net income
Other comprehensive income
Mark to market of foreign exchange hedges, net of tax benefit of $0
for the 2020 period
Total other comprehensive income
Comprehensive income
$
$
Years Ended December 31,
2021
37,045 $
$
2022
45,429
2020
28,223
—
—
45,429
$
—
—
37,045 $
1
1
28,224
The accompanying notes are an integral part of these consolidated financial statements.
35
United States Lime & Minerals, Inc.
Consolidated Statements of Stockholders’ Equity
(dollars in thousands)
Common Stock
Shares
Outstanding Amount
663
1
2
—
—
—
5,622,826
12,271
18,609
(5,622)
—
—
Additional
Paid-In
Capital
27,464
80
1,913
—
—
—
Accumulated
Other
Comprehensive Retained Treasury
(Loss) Income
Earnings
(1)
—
—
—
—
—
Stock
(54,560)
—
—
(557)
—
—
243,566
—
—
—
(3,603)
28,223
—
—
5,648,084
5,310
18,279
(5,661)
—
—
—
5,666,012
2,400
19,297
(5,630)
—
—
—
5,682,079 $
—
—
666
1
2
—
—
—
—
669
—
2
—
—
—
—
671
$
—
—
29,457
83
2,234
—
—
—
—
31,774
120
2,634
—
—
—
—
34,528
$
1
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— $
—
28,223
268,186
—
—
—
(3,620)
37,045
37,045
301,611
—
—
—
(4,536)
45,429
45,429
342,504 $
—
—
(55,117)
—
—
(731)
—
—
—
(55,848)
—
—
(767)
—
—
—
(56,615)
$
Total
217,132
81
1,915
(557)
(3,603)
28,223
1
28,224
243,192
84
2,236
(731)
(3,620)
37,045
37,045
278,206
120
2,636
(767)
(4,536)
45,429
45,429
321,088
Balances at December 31, 2019
Stock options exercised
Stock-based compensation
Treasury shares purchased
Cash dividends paid
Net income
Mark to market of foreign
exchange hedges, net of $0 tax
expense
Comprehensive income
Balances at December 31, 2020
Stock options exercised
Stock-based compensation
Treasury shares purchased
Cash dividends paid
Net income
Comprehensive income
Balances at December 31, 2021
Stock options exercised
Stock-based compensation
Treasury shares purchased
Cash dividends paid
Net income
Comprehensive income
Balances at December 31, 2022
The accompanying notes are an integral part of these consolidated financial statements.
36
United States Lime & Minerals, Inc.
Consolidated Statements of Cash Flows
(dollars in thousands)
OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation, depletion and amortization
Impairment of long-lived assets
Amortization of deferred financing costs
Deferred income taxes
(Gain) loss on disposition of property, plant and equipment
Stock-based compensation
Changes in operating assets and liabilities:
Trade receivables, net
Inventories, net
Prepaid expenses and other current assets
Other assets
Accounts payable and accrued expenses
Other liabilities
Net cash provided by operating activities
INVESTING ACTIVITIES:
Purchase of property, plant and equipment
Acquisition of a business, net of cash acquired
Proceeds from sale of property, plant and equipment
Net cash used in investing activities
FINANCING ACTIVITIES:
Cash dividends paid
Proceeds from exercise of stock options
Purchase of treasury shares
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
2022
2021
2020
$
45,429
$
37,045 $
28,223
22,199
—
2
2,527
(312)
2,636
(6,438)
(4,294)
(191)
8
2,701
96
64,363
(26,815)
(5,630)
1,294
(31,151)
(4,536)
120
(767)
(5,183)
28,029
105,355
133,384
$
20,898
—
6
1,524
10
2,236
(3,736)
94
(999)
(41)
(1,101)
(247)
55,689
(29,914)
—
285
(29,629)
(3,620)
84
(731)
(4,267)
21,793
83,562
105,355 $
$
19,611
1,550
5
4,313
462
1,915
1,109
(1,390)
(106)
3
2,579
301
58,575
(17,133)
(8,392)
331
(25,194)
(3,603)
81
(557)
(4,079)
29,302
54,260
83,562
The accompanying notes are an integral part of these consolidated financial statements.
37
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
(1) Summary of Significant Accounting Policies
(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, Missouri, Oklahoma and Texas through its wholly owned subsidiaries, Arkansas Lime
Company, ART Quarry TRS LLC (DBA Carthage Crushed Limestone), Colorado Lime Company, Mill Creek
Dolomite, LLC, 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.
(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 United States 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,
2021
2020
2022
Cash paid during the year for:
Interest
Income taxes
(e) Revenue Recognition
$
113
$ 7,827
$
151 $
$ 9,483 $
152
975
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 at a point in time, 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
38
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements (Continued)
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
included in revenues was $44,233, $34,307 and $28,373 for 2022, 2021 and 2020, 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 9 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) 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
United States 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.
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, and are generally fixed, short-term,
and do not contain a significant financing component. The Company estimates credit losses relating to trade
receivables based on an assessment of the current and forecasted probability of collection, historical trends,
economic conditions and other significant events that may impact the collectability of accounts receivables.
Due to the relatively homogenous nature of its trade receivables, the Company does not believe there is any
meaningful asset-specific differences within its accounts receivable portfolio that would require the portfolio to
be grouped below the consolidated level for review of credit losses. Credit losses relating to trade receivables
have generally been within management expectations and historical trends. Uncollected trade receivables are
charged-off when identified by management to be unrecoverable. Trade receivables are presented net of the
related estimated credit losses, which totaled $550 and $450 at December 31, 2022 and 2021, respectively.
Additions, adjustments for expected credit loss factors, and write-offs to the Company’s estimated credit losses
during the years ended December 31 are as follows:
Beginning balance
Additions
Adjustments for expected credit loss factors
Write-offs
Ending balance
2022
2021
450 $
108
—
(8)
550 $
398
66
(14)
—
450
$
$
39
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements (Continued)
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
(g) 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:
Lime and limestone inventories:
Raw materials
Finished goods
Service parts inventories
(h) Property, Plant and Equipment
December 31,
2022
2021
$
$
5,506 $
2,951
8,457
11,122
19,579 $
3,232
2,677
5,909
9,207
15,116
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, 2022 and 2021 included $6,534 and $12,556,
respectively, of construction in progress for various capital projects. No interest costs were capitalized for the
years ended December 31, 2022 and 2021. At December 31, 2022 and 2021, accounts payable and accrued
expenses included $1,079 and $1,369, 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
Machinery and equipment
Furniture and fixtures
Automotive equipment
3 - 25 years
2 - 30 years
3 - 10 years
3 - 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 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.
40
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements (Continued)
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
During 2020, the Company recognized an impairment charge of $1,550 to adjust the carrying value of certain
long-lived assets related to its natural gas interests. Continuing low prices for natural gas and natural gas
liquids have reduced the estimates for future economically feasible production from the Company’s drilled
wells, resulting in the Company’s determination that the estimated fair value of its natural gas assets was less
than their carrying value in 2020. Fair value was determined as the present value of the estimated future cash
flows of the natural gas interests.
(i) 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 $1,556 and $1,553 as
of December 31, 2022 and 2021, respectively, are included in Other liabilities and Accrued expenses on the
Company’s Consolidated Balance Sheets. As of December 31, 2022, assets, net of accumulated depreciation,
associated with the Company’s AROs totaled $679. During 2022 and 2021, the Company spent $24 and $58,
respectively, on its AROs, and recognized accretion expense of $97, $92 and $90 in 2022, 2021 and 2020,
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 2023 through 2027 relating to its AROs.
(j) Accrued Expenses
Accrued expenses consist of the following:
Personnel related expenses
Income taxes
Other taxes
Utilities
Other
(k) Environmental Expenditures
December 31,
2022
2,970 $
237
1,208
1,207
779
6,401 $
2021
2,344
—
1,374
615
523
4,856
$
$
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 $779 in 2022, $665 in 2021 and
$730 in 2020.
41
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements (Continued)
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
(l) Income and Dividends Per Share of Common Stock
The following table sets forth the computation of basic and diluted income per common share:
Net income for basic and diluted income per
common share
Weighted-average shares for basic income per
common share
Effect of dilutive securities:
Employee and director stock options(1)
Adjusted weighted-average shares and assumed
exercises for diluted income per common share
Basic net income per common share
Diluted net income per common share
Years Ended December 31,
2021
2020
2022
$
45,429
$
37,045 $
28,223
5,671,960
5,656,367
5,629,425
8,449
11,992
10,438
5,680,409
8.01
8.00
$
$
$
$
5,668,359
5,639,863
5.01
5.00
6.55 $
6.54 $
(1)
Excludes 16,125, 600 and 5,550 stock options in 2022, 2021 and 2020, respectively, as antidilutive
because the exercise price exceeded the average per share market price for the periods presented.
The Company paid $0.80, $0.64 and $0.64 of cash dividends per share of common stock in 2022, 2021 and
2020, respectively.
On April 30, 2021, the shareholders approved an increase in the Company’s number of authorized shares of
common stock from 15,000,000 to 30,000,000.
(m) 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.
(n) 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.
(o) 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 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.
42
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements (Continued)
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
(2) 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, 2022 or 2021. The Company had $347 of letters of
credit issued at December 31, 2022, which count as draws against the available commitment under the Revolving
Facility.
(3) 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 6 years, with a weighted-average remaining
lease term of 3 years at December 31, 2022. Some operating leases include options to extend the leases for up to 5 years.
The Company’s lease calculations include the impact of options to extend when it is reasonably certain the Company
will exercise the option. The Company used a weighted-average discount rate of 3.0% and 1.1% for leases entered into
during 2022 and 2021, respectively. The components of net operating lease costs for 2022, 2021 and 2020 were as
follows (in thousands):
Operating lease costs(1)
Operating lease costs(1)
Rental revenues
Net operating lease costs
Classification
Cost of revenues
Selling, general and administrative
expenses
Interest and other income, net
(1) Includes the costs of leases with a term of one year or less.
Year Ended December 31,
2021
2020
2022
$
2,374
$
1,706
$
1,552
275
(70)
2,579
$
259
(98)
1,867
$
$
243
(89)
1,706
43
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements (Continued)
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
As of December 31, 2022, 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):
2023
2024
2025
2026
2027
Thereafter
Total future minimum lease payments
Less imputed interest
Present value of lease liabilities
$
$
1,408
1,354
1,082
1,054
694
250
5,842
(302)
5,540
Supplemental cash flow information pertaining to the Company’s leasing activity for the years ended
December 31, 2022, 2021 and 2020 was as follows (in thousands):
Cash payments for operating lease liabilities
Right-of-use assets obtained in exchange for operating lease obligations
$
$
1,660
3,456
$
$
1,420 $
2,377 $
1,486
314
Year Ended December 31,
2021
2020
2022
(4) Income Taxes
Income tax expense (benefit) for the years ended December 31 is as follows:
Current income tax expense
Deferred income tax expense
Income tax expense
$
2022
8,606
2,527
$ 11,133
2021
2020
$ 7,949 $ 1,537
4,312
$ 9,473 $ 5,849
1,524
A reconciliation of income taxes computed at the federal statutory rate to income tax expense for the years
ended December 31 is as follows:
2022
Percent of
Pretax
Income
Amount
2021
Percent of
Pretax
2020
Percent of
Pretax
Income
Amount
Income Amount
Income taxes computed at the federal
statutory rate
(Reduction) increase in taxes resulting from:
Statutory depletion in excess of cost depletion
State income taxes, net of federal income
tax benefit
Disallowed executive compensation
Other
Income tax expense
$ 11,878
21.0 % $ 9,769
21.0 % $ 7,155
21.0 %
(1,869)
(3.3)
(1,389)
(3.0)
(1,266)
(3.7)
557
493
74
$ 11,133
462
1.0
456
0.9
0.1
175
19.7 % $ 9,473
(262)
1.0
—
1.0
0.4
222
20.4 % $ 5,849
(0.8)
—
0.7
17.2 %
44
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements (Continued)
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
Components of the Company’s deferred tax liabilities and assets are as follows:
Deferred tax liabilities
Lime and limestone property, plant and equipment
Operating lease right-of-use assets
Natural gas interests drilling costs and equipment
Deferred tax assets
Operating lease liabilities
Other
Deferred tax liabilities, net
December 31, December 31,
2022
2021
$
$
25,703 $
1,238
259
27,200
22,992
724
387
24,103
1,276
342
1,618
25,582 $
740
308
1,048
23,055
Current income taxes are classified on the Company’s Consolidated Balance Sheets as follows:
Prepaid expenses and other current assets
Accrued expenses
December 31, December 31,
2022
2021
$
$
— $
237 $
543
—
The Company had no federal net operating loss carry forwards at December 31, 2022. 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, 2019 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, 2018 and subsequent years. The Company treats interest and penalties on
income tax liabilities as income tax expense.
(5) 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, Carthage, and Texas Lime Company. Company contributions to these plans
were $311, $322 and $282 in 2022, 2021 and 2020, respectively.
(6) 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
45
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements (Continued)
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
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, 2022, 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
62,876.
The Company recorded $2,636, $2,236 and $1,915 for stock-based compensation expense related to stock
options and shares of restricted stock for 2022, 2021 and 2020, respectively. The amounts included in cost of revenues
were $211, $197 and $312 and in selling, general and administrative expense were $2,425, $2,039 and $1,603, for 2022,
2021 and 2020, respectively.
A summary of the Company’s stock option and restricted stock activity and related information for the year
ended December 31, 2022 and certain other information for the years ended December 31, 2022, 2021 and 2020 are as
follows:
Weighted-
Average
Exercise
Aggregate
Intrinsic
Price
Value
Stock
Options
Weighted-
Average
Restricted Grant-Date
Fair Value
Stock
Outstanding (stock options); non-vested (restricted stock) at
December 31, 2021
Granted
Exercised (stock options); vested (restricted stock)
Forfeited
Outstanding (stock options); non-vested (restricted stock) at
December 31, 2022
Exercisable at December 31, 2022
46,500
9,900
(2,400)
—
$
91.04
133.18
50.11
—
54,000
44,000
$ 100.58
92.12
$
$
$
$
1,788
75
18,146
19,601
157 (18,589)
(289)
—
$ 121.26
141.11
120.25
117.84
2,170
2,170
18,869
n/a
$ 132.73
n/a
Weighted-average fair value of stock options granted during the year
Weighted-average remaining contractual life for stock options in years
Total fair value of stock options vested during the year
Total intrinsic value of stock options exercised during the year
Total fair value of restricted stock vested during the year
2022
49.76
6.87
287
157
2,235
$
$
$
$
2021
42.10 $
6.85
321 $
647 $
2,096 $
$
$
$
$
2020
31.30
6.74
310
1,128
1,612
There were 10,000 non-vested stock options at December 31, 2022, and the weighted-average remaining
contractual life of the outstanding and exercisable stock options at such date was 6.87 years. The total compensation cost
not yet recognized for restricted stock at December 31, 2022 was $2,168, 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 2022, 2021 and 2020 grants: risk-free interest rates of
2.92% to 3.94% (weighted average 3.74%) in 2022, 0.86% to 1.26% (weighted average 1.19%) in 2021 and 0.37% to
0.53% (weighted average 0.42%) in 2020; a dividend yield of 0.57% to 0.73% (weighted average 0.62%) in 2022, 0.46%
to 0.50% (weighted average 0.49%) in 2021, 0.56% to 0.80% (weighted average 0.64%) in 2020; and a volatility factor
of .374 to .385 (weighted average .382) in 2022, .366 to .373 (weighted average .371) in 2021 and .346 to .356 (weighted
average .354) in 2020, based on the daily per-share closing prices for five years preceding the date of issuance. In
46
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements (Continued)
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
addition, the fair value of these options was estimated based on an expected life of 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.
(7) Share Repurchases
During 2022, 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 5,630 shares at a weighted-average price of $136.50 per share.
(8) 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, 2022, the Company had $1,521 for open equipment and construction
contracts.
(9) 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. Other identifiable assets includes assets related to the Company’s natural gas interests, unallocated
corporate assets, and cash items.
47
United States Lime & Minerals, Inc.
Notes to Consolidated Financial Statements (Continued)
(dollars in thousands, except per share amounts)
Years Ended December 31, 2022, 2021 and 2020
Operating results and certain other financial data for the years ended December 31, 2022, 2021 and 2020 for the
Company’s Lime and Limestone Operations segment and Other are as follows:
Revenues
Lime and limestone operations
Other
Total revenues
Depreciation, depletion and amortization
Lime and limestone operations
Other
Total depreciation, depletion and
amortization
Gross profit (loss)
Lime and limestone operations
Other
Total gross profit
Operating profit (loss)
Lime and limestone operations
Other(1)
Total operating profit
Identifiable assets, at period end
Lime and limestone operations
Other
Total identifiable assets
Capital expenditures
Lime and limestone operations
Other
Total capital expenditures
2022
233,421
2,729
236,150
21,368
553
21,921
68,951
1,391
70,342
53,404
1,379
54,783
228,984
138,788
367,772
26,815
—
26,815
$
$
$
$
$
$
$
$
$
$
$
$
2021
187,365 $
1,890
189,255 $
2020
159,707
997
160,704
20,052 $
578
18,664
715
20,630 $
19,379
58,651 $
609
59,260 $
47,983
(396)
47,587
45,835 $
582
46,417 $
35,815
(1,946)
33,869
204,815 $
111,381
316,196 $
190,946
88,152
279,098
29,914 $
—
29,914 $
17,133
—
17,133
$
$
$
$
$
$
$
$
$
$
$
$
(1)
Other Operating profit for the year ended December 31, 2020 was adversely impacted by an impairment
charge of $1,550 to adjust the carrying value of long-lived assets related to the Company’s natural gas
interests.
(10) Subsequent Events
On February 3, 2023, the Company declared a regular quarterly cash dividend of $0.20 per share on the
Company’s common stock. This dividend is payable on March 17, 2023 to shareholders of record at the close of business
on February 24, 2023.
48
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of disclosure controls and procedures. The Company’s management, with the participation of the
Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of the
Company’s disclosure controls and procedures as of the end of the period covered by this Report. Based on that
evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures as of the end of the
period covered by this Report were effective.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision
of the Company’s CEO and CFO to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of the Company’s financial statements for external purposes in accordance with generally accepted
accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even
those systems determined to be effective can provide only reasonable assurance with respect to financial statement
preparation and presentation. Additionally, projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the
policies or procedures may deteriorate.
As of December 31, 2022, management assessed the effectiveness of the Company’s internal control over
financial reporting based on the criteria for effective internal control over financial reporting established in the 2013
“Internal Control-Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway
Commission (the “COSO criteria”). Based on the assessment, management determined that the Company maintained
effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.
Grant Thornton LLP, the Company’s independent registered public accounting firm, has issued an audit report
on the effectiveness of the Company’s internal control over financial reporting, which appears elsewhere in this Report
on Form 10-K.
Changes in internal control over financial reporting. No change in the Company’s internal control over
financial reporting occurred during the Company’s most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
49
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The information appearing under “Election of Directors,” “Information About Our Nominees for Director,”
“Information About Our Executive Officers Who Are Not Directors,” and “Corporate Governance” in the definitive
Proxy Statement for the Company’s 2023 Annual Meeting of Shareholders (the “2023 Proxy Statement”) is hereby
incorporated by reference in answer to this Item 10. The Company anticipates that it will file the 2023 Proxy Statement
with the SEC on or before April 30, 2023.
ITEM 11. EXECUTIVE COMPENSATION.
The information appearing under “Executive Compensation” and “Compensation of Directors” in the 2023
Proxy Statement is hereby incorporated by reference in answer to this Item 11.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The information appearing under “Voting Securities and Principal Shareholder,” “Shareholdings of Company
Directors and Executive Officers” and “Executive Compensation” in the 2023 Proxy Statement is hereby incorporated by
reference in answer to this Item 12.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
The information appearing under “Voting Securities and Principal Shareholder” and “Corporate Governance” in
the 2023 Proxy Statement is hereby incorporated by reference in answer to this Item 13.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The information appearing under “Independent Auditors” in the 2023 Proxy Statement is hereby incorporated
by reference in answer to this Item 14.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)
1. The following financial statements are included in Item 8:
PART IV
Reports of Independent Registered Public Accounting Firm
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2022 and 2021;
Consolidated Statements of Income for the Years Ended December 31, 2022, 2021 and
2020;
Consolidated Statements of Comprehensive Income for the Years Ended December 31,
2022, 2021 and 2020;
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31,
2022, 2010 and 2020;
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021
and 2020; and
Notes to Consolidated Financial Statements.
2. All financial statement schedules are omitted because they are not applicable or are immaterial or the
required information is presented in the consolidated financial statements or the related notes.
50
(b) Exhibits
The Exhibit Index set forth below is incorporated by reference in response to this Item.
EXHIBIT INDEX
3.1 Articles of Amendment to the Restated Articles of Incorporation, as Amended, of United States Lime &
Minerals, Inc., dated as of May 4, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s
Current Report on Form 8-K filed May 4, 2021, File Number 000-04197).
3.2 Restated Articles of Incorporation, as Amended, of United States Lime & Minerals, Inc. (incorporated by
reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30,
2021, File Number 000-04197).
3.3 Amended and Restated Bylaws of United States Lime & Minerals, Inc. as of November 1, 2022
(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed
November 3, 2022, File Number 000-04197).
4.1 Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934, as
Amended.
10.1.1 Form of stock option grant agreement under the United States Lime & Minerals, Inc. 2001 Long-Term
Incentive Plan, as Amended and Restated (incorporated by reference to Exhibit 10.2.1 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2006, File Number 000-04197).
10.1.2 Form of restricted stock grant agreement under the United States Lime & Minerals, Inc. 2001 Long-Term
Incentive Plan, as Amended and Restated (incorporated by reference to Exhibit 10.2.2 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2006, File Number 000-04197).
10.1.3 United States Lime & Minerals, Inc. 2001 Long-Term Incentive Plan, as Amended and Restated
(incorporated by reference to Exhibit A to the Company’s definitive Proxy Statement for its Annual
Meeting of Shareholders held on May 3, 2019, File Number 000-04197).
10.2 Employment Agreement effective as of January 1, 2020 between United States Lime & Minerals, Inc. and
Timothy W. Byrne, including Cash Performance Bonus Award Agreement dated as of January 1, 2020
between United States Lime and Minerals, Inc. and Timothy W. Byrne, set forth as Exhibit A thereto
(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2020, File Number 000-04197).
10.3 Credit Agreement dated as of August 25, 2004 among United States Lime & Minerals, Inc., each Lender
from time to time a party thereto, and Wells Fargo Bank, N.A., as Administrative Agent, Swing Line
Lender and L/C Issuer (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K dated August 31, 2004, File Number 000-04197).
10.4 Security Agreement dated as of August 25, 2004 among United States Lime & Minerals, Inc., Arkansas
Lime Company, Colorado Lime Company, Texas Lime Company and U. S. Lime Company-Houston, in
favor of Wells Fargo Bank, N. A., as Administrative Agent (incorporated by reference to Exhibit 10.2 to
the Company’s Current Report on Form 8-K dated August 31, 2004, File Number 000-4197).
10.5 Second Amendment to Credit Agreement dated as of October 19, 2005 among United States Lime &
Minerals, Inc., each Lender from time to time a party thereto, and Wells Fargo Bank, N.A., as
Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K dated October 20, 2005, File Number 000-04197).
51
10.6 Third Amendment to Credit Agreement dated as of March 30, 2007 among United States Lime &
Minerals, Inc., each Lender from time to time a party thereto, and Wells Fargo Bank, N.A., as
Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K dated March 30, 2007, File Number 000-04197).
10.7 Fourth Amendment to Credit Agreement dated as of June 1, 2010 among United States Lime &
Minerals, Inc., each Lender from time to time a party thereto, and Wells Fargo Bank, N.A., as
Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K dated June 1, 2010, File Number 000-04197).
10.8 Fifth Amendment to Credit Agreement dated as of May 7, 2015 among United States Lime & Minerals,
Inc., each lender from time to time a party thereto, and Wells Fargo Bank, N.A., as Administrative Agent
(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2015, File Number 000-04197).
10.9 Sixth Amendment to Credit Agreement dated as of October 27, 2016 among United States Lime &
Minerals, Inc., each lender from time to time a party thereto, and Wells Fargo Bank, N.A., as
administrative agent (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2016, File Number 000-04197).
10.10 Seventh Amendment to Credit Agreement dated as of May 2, 2019, among United States Lime &
Minerals, Inc., each lender from time to time a party thereto, and Wells Fargo Bank, N.A., as
administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2019, File Number 000-04197).
10.11 Eight Amendment to Credit Agreement dated as of May 2, 2019, among United States Lime & Minerals,
Inc., each lender from time to time a party thereto, and Wells Fargo Bank, N.A., as administrative agent
(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2019, File Number 000-04197).
10.12 Ninth Amendment to Credit Agreement dated as of November 21, 2019, among United States Lime &
Minerals, Inc., each lender from time to time a party thereto, and Wells Fargo Bank, N.A., as
administrative agent (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2019, File Number 000-4197).
21.1 Subsidiaries of the Company.
23.1 Consent of Independent Registered Public Accounting Firm.
23.2 Consent of Qualified Person.
31.1 Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer.
31.2 Rule 13a-14(a)/15d-14(a) Certification by Chief Financial Officer.
32.1 Section 1350 Certification by Chief Executive Officer.
32.2 Section 1350 Certification by Chief Financial Officer.
95.1 Mine Safety Disclosures.
52
96.1 Technical Report Summary on Texas Lime Company Limestone Operation, Johnson County, Texas,
USA, effective December 31, 2021, with a report date of March 2, 2022 (incorporated by reference to
Exhibit 96.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, File
Number 000-4197).
96.2 Technical Report Summary on Arkansas Lime Company Limestone Operation, Independence County,
Arkansas, USA effective December 31, 2021, with a report date of March 2, 2022 (incorporated by
reference to Exhibit 96.2 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2021, File Number 000-4197).
96.3 Technical Report Summary on ACT Holdings Company Limestone Operation, Izzard County, Arkansas,
USA, effective December 31, 2021, with a report date of March 2, 2022 (incorporated by reference to
Exhibit 96.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, File
Number 000-4197).
96.4 Technical Report Summary on U.S. Lime Company-St. Clair – Marble Mountain Limestone Operation,
Sequoyah County, Oklahoma, USA, effective December 31, 2021, with a report date of March 2, 2022
(incorporated by reference to Exhibit 96.4 to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2021, File Number 000-4197).
101
Interactive Data Files (formatted as Inline XBRL).
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
Exhibits 10.1.1 through 10.2 are management contracts or compensatory plans or arrangements required to be filed as
exhibits.
ITEM 16. FORM 10-K SUMMARY.
Not Applicable.
53
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
UNITED STATES LIME & MINERALS, INC.
Date: February 23, 2023
By:
/s/ TIMOTHY W. BYRNE
Timothy W. Byrne,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date: February 23, 2023
Date: February 23, 2023
Date: February 23, 2023
Date: February 23, 2023
Date: February 23, 2023
Date: February 23, 2023
Date: February 23, 2023
/s/ TIMOTHY W. BYRNE
Timothy W. Byrne,
President, Chief Executive Officer, and Director
(Principal Executive Officer)
/s/ MICHAEL L. WIEDEMER
Michael L. Wiedemer,
Vice President and Chief Financial Officer (Principal
Financial and Accounting Officer)
/s/ ANTOINE M. DOUMET
Antoine M. Doumet,
Director and Chairman of the Board
/s/ RICHARD W. CARDIN
Richard W. Cardin,
Director
/s/ SANDRA C. DUHÉ
Sandra C Duhé,
Director
/s/ TOM S. HAWKINS
Tom S. Hawkins,
Director
/s/ BILLY R. HUGHES
Billy R. Hughes,
Director
By:
By:
By:
By:
By:
By:
By:
54
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[This page intentionally left blank]
DIRECTORY
DIRECTORS
Timothy W. Byrne (1)
President and Chief Executive Officer,
United States Lime & Minerals, Inc.
Richard W. Cardin (2,3,4)
Retired Partner, Arthur Andersen LLP
Antoine M. Doumet (1,3,4)
Chairman, United States Lime & Minerals,
Inc.
Private businessman and investor
Sandra C. Duhé (2,3,4)
Professor and Chair, Division of Corporate
Communication and Public Affairs,
Southern Methodist University
Billy R. Hughes (1,2,3,4)
Retired Senior Vice President –
Development, United States Lime &
Minerals, Inc.
Tom S. Hawkins, Jr. (2,3,4)
Retired President of the Louisiana Division
of Atmos Energy Corporation
EXECUTIVE OFFICERS
Timothy W. Byrne
President and Chief Executive Officer
John J. Gagnon
Vice President – Business Development
Nathan M. O’Neill
Vice President – Production
Timothy W. Stone
Vice President – Sales and Marketing
Michael L. Wiedemer
Vice President and Chief Financial
Officer
CORPORATE OFFICE
5429 LBJ Freeway, Suite 230
Dallas, Texas 75240
Tel.: (972) 991-8400
E-mail: uslime@uslm.com
Website: www.uslm.com
(1) Executive Committee
(2) Audit Committee
(3) Nominating and Corporate Governance Committee
(4) Compensation Committee
TRANSFER AGENT
AND REGISTRAR
Computershare Investor Services
P.O. Box 30170
College Station, TX 77842
Toll Free: (800) 522-6645
Toll: (312) 360-5383
INDEPENDENT AUDITORS
Grant Thornton LLP
Dallas, Texas
STOCK LISTED
The Nasdaq Global Market®
Symbol: USLM
COUNSEL
Morgan, Lewis & Bockius LLP
Washington, D.C.
OPERATING SUBSIDIARIES
Arkansas Lime Company
P.O. Box 2356
Batesville, AR 72503
Tel: (870) 793-2301
Colorado Lime Company
1468 Hwy. 50
Delta, CO 81416
Tel: (970) 874-8300
Texas Lime Company
P.O. Box 851
Cleburne, TX 76033
Tel: (817) 641-4433
U.S. Lime Company
5420 Allison Rd.
Houston, TX 77048
Tel: (713) 987-5463
U.S. Lime Company – St. Clair
P.O. Box 160
Marble City, OK 74945
Tel: (918) 775-4466
U.S. Lime Company – Shreveport
P.O. Box 6771
Shreveport, LA 71136
Tel: (318) 865-9655
Carthage Crushed Limestone
P.O. Box 1086
Carthage, MO 64836
Tel: (417) 526-5600
U.S. Lime Co. – Transportation
5429 LBJ Freeway, Suite 230
Dallas, TX 75240
Tel: (972) 991-5690
Mill Creek Dolomite, LLC
P.O. Box 239
Mill Creek, OK 74856
Tel: (580) 384-5271
UNITED STATES LIME & MINERALS, INC.
5429 LBJ FREEWAY SUITE 230 DALLAS TEXAS 75240 WWW.USLM.COM