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What changed in UNITED STATES LIME & MINERALS INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of UNITED STATES LIME & MINERALS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+209 added−209 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-23)

Top changes in UNITED STATES LIME & MINERALS INC's 2023 10-K

209 paragraphs added · 209 removed · 186 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

88 edited+13 added−9 removed45 unchanged
Biggest changeLimestone mineral reserves are included in limestone mineral resources, net of any mining loss factors. ​ 2 Table of Contents ​ ​ ​ ​ ​ ​ Summary of Total Limestone Mineral Resources as of December 31, 2022 ​ Measured Resources (tons) Cutoff Grade Indicated Resources (tons) Cutoff Grade Measured + Indicated Resources (tons) Cutoff Grade 281,539,000 Above 96.0% (CaCO3) 137,986,000 Above 96.0% (CaCO3) 419,525,000 Above 96.0% (CaCO3) ​ ​ ​ ​ ​ ​ ​ Summary of Total Limestone Mineral Resources as of December 31, 2021 ​ Measured Resources (tons) Cutoff Grade Indicated Resources (tons) Cutoff Grade Measured + Indicated Resources (tons) Cutoff Grade 284,993,000 Above 96.0% (CaCO3) 137,986,000 Above 96.0% (CaCO3) 422,979,000 Above 96.0% (CaCO3) ​ ​ ​ ​ ​ ​ ​ Summary of Total Limestone Mineral Reserves as of December 31, 2022 Proven Reserves (tons) Cutoff Grade Probable Reserves (tons) Cutoff Grade Total Mineral Reserves (tons) Cutoff Grade 161,071,000 Above 96.0% (CaCO3) 72,037,000 Above 96.0% (CaCO3) 233,108,000 Above 96.0% (CaCO3) ​ ​ ​ ​ ​ ​ ​ Summary of Total Limestone Mineral Reserves as of December 31, 2021 Proven Reserves (tons) Cutoff Grade Probable Reserves (tons) Cutoff Grade Total Mineral Reserves (tons) Cutoff Grade 164,146,000 Above 96.0% (CaCO3) 72,037,000 Above 96.0% (CaCO3) 236,183,000 Above 96.0% (CaCO3) ​ Set forth below is a description of each of the Company’s mining properties.
Biggest changeLimestone mineral resources as of December 31, 2022, have been recast from the prior year presentation to present as exclusive of limestone mineral reserves in order to conform to the current year presentation. ​ ​ ​ ​ ​ ​ ​ Summary of Total Limestone Mineral Resources - Exclusive of Mineral Reserves - as of December 31, 2023, Based on $12.70 per Ton (in thousands of tons) ​ Measured Resources (tons) Cutoff Grade Indicated Resources (tons) Cutoff Grade ​ Measured + Indicated Resources (tons) Cutoff Grade 18,193 Above 96.0% (CaCO 3 ) 137,986 Above 96.0% (CaCO 3 ) ​ 156,179 Above 96.0% (CaCO 3 ) ​ ​ ​ ​ ​ ​ ​ ​ Summary of Total Limestone Mineral Resources - Exclusive of Mineral Reserves - as of December 31, 2022, Based on $12.70 per Ton (in thousands of tons) ​ Measured Resources (tons) Cutoff Grade Indicated Resources (tons) Cutoff Grade ​ Measured + Indicated Resources (tons) Cutoff Grade 18,193 Above 96.0% (CaCO 3 ) 137,986 Above 96.0% (CaCO 3 ) ​ 156,179 Above 96.0% (CaCO 3 ) ​ ​ ​ ​ ​ ​ ​ ​ Summary of Total Limestone Mineral Reserves as of December 31, 2023, Based on $12.70 per Ton (in thousands of tons) Proven Reserves (tons) Cutoff Grade Probable Reserves (tons) Cutoff Grade ​ Total Mineral Reserves (tons) Cutoff Grade 157,863 Above 96.0% (CaCO 3 ) 72,037 Above 96.0% (CaCO 3 ) ​ 229,900 Above 96.0% (CaCO 3 ) ​ ​ ​ ​ ​ ​ ​ ​ Summary of Total Limestone Mineral Reserves as of December 31, 2022, Based on $12.70 per Ton (in thousands of tons) Proven Reserves (tons) Cutoff Grade Probable Reserves (tons) Cutoff Grade ​ Total Mineral Reserves (tons) Cutoff Grade 161,071 Above 96.0% (CaCO 3 ) 72,037 Above 96.0% (CaCO 3 ) ​ 233,108 Above 96.0% (CaCO 3 ) ​ Set forth below is a description of each of the Company’s limestone mining properties.
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, 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, oil and gas services, and agriculture (including poultry producers) industries.
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.
In 2022, the Company improved and developed the transportation infrastructure between the Love Hollow Quarry and Arkansas Lime’s production facilities, 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.
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.
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, Love Hollow, and Mill Creek Quarries.
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.
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 surface mines.
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.
These cases may involve, among other questions, challenges by operators to citations, orders, and penalties that 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.
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.
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 the St. Clair and Carthage mines, the Company mines limestone underground using room and pillar mining.
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.
Lime Company-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 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.
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 adversely affect the Company.
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.
It is likely, 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.
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.
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 an agricultural 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.
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 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 2023 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.
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.
Lime slurry is used primarily in soil stabilization for highway, road and building construction. Product Sales. In 2023, 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.
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.
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, 2023, 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.
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.
All of the Company’s 2023 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.
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.
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.
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.
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. Employee Development and Training .
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.
In addition, the Company will continue to evaluate internal and external opportunities for expansion, growth and increased profitability, as conditions warrant, or opportunities arise. The Company may have to revise its 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.
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.
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 Lab analyzes production samples for cutoff grade consistency with expectations used in the estimates for limestone mineral resources and reserves.
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.
Approximately 650 customers accounted for the Company’s sales of lime and limestone products during 2023. 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 its geographic region and by industry concentration.
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.
These regulations require permitting with the respective state to ensure reclamation 15 Table of Contents 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.
In addition, utility plants are 8 Table of Contents 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.
In addition, utility plants are 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.
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 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, zoning and land use, mine permitting and operations, mine safety, and reclamation and remediation. ​ Environmental Laws.
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.
In January 2023, under Section 112 of the Clean Air Act, the 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”) at major sources of hazardous air pollutants within the lime industry.
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.
The Company has not been named as a potentially responsible party in any federal superfund cleanup site or state-led cleanup site. 13 Table of Contents The rate of change of Environmental Laws continues to be rapid, and compliance can require significant expenditures.
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.
At December 31, 2023, the overall average interest under the oil and gas rights lease was 34.7% on 33 producing wells. 16 Table of Contents 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.
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”) and consist principally of a lease with respect to oil and gas rights on the Johnson County, Texas property, located in the Barnett Shale Formation. Pursuant to the lease, U.S.
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 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 $0.9 million, $0.4 million, and $0.7 million in 2023, 2022, and 2021, respectively. Mine Safety .
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.
The proposed MACT rule would establish stringent emission limitations for four hazardous air pollutants which will require additional pollution control equipment at lime kilns subject to the rule.
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.
The Company considers the four mining properties associated with Texas Lime, Batesville, Love Hollow, 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 Properties are disclosures with respect to such property’s limestone mineral resources and reserves.
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.
The Clean Air Act and analogous state laws require the Company to obtain authorization to construct or modify existing facilities, and its lime plants are subject to operating permits that have significant ongoing compliance costs.
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.
The Company’s competitors are predominantly private companies. 12 Table of Contents 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.
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 Table of Contents 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.
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. ​ The Company incurred capital expenditures related to environmental matters of $1.5 million, $0.8 million, and $0.5 million in 2023, 2022, and 2021, respectively.
The Company believes its accrual of $1.6 million for AROs at December 31, 2022 is reasonable. 11 Table of Contents 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.
The Company believes its accrual of $1.5 million for AROs at December 31, 2023 is reasonable. 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.
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”).
Clair operates the St. Clair Mine and has crushed limestone, PLS, quicklime, 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.
No new wells have been completed since 2011, and there are no plans to drill additional wells under either the 12 Table of Contents 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.
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 $0.4 million as of December 31, 2023.
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.
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, 2023, the Company employed 333 persons, 111 of whom were represented by unions. The Company is a party to three collective bargaining agreements.
Clair Mine - Summary of Limestone Mineral Reserves as of December 31, 2022 as of December 31, 2021 Resource Category Reserves (tons) Cutoff Grade Mining Recovery ​ Reserves (tons) Cutoff Grade Mining Recovery Proven Reserves 22,873,000 96.0(CaCO 3 ) 81% ​ 23,387,000 96.0(CaCO 3 ) 81% Probable Reserves - 96.0(CaCO 3 ) 81% ​ - 96.0(CaCO 3 ) 81% Total Mineral Reserves 22,873,000 96.0(CaCO 3 ) 81% ​ 23,387,000 96.0(CaCO 3 ) 81% ​ Carthage operates an underground mine and has limestone production facilities located on approximately 800 acres that it owns containing high-quality limestone.
Clair Mine - Summary of Limestone Mineral Reserves (in thousands of tons) as of December 31, 2023 as of December 31, 2022 Resource Category Reserves (tons) Cutoff Grade Mining Recovery ​ Reserves (tons) Cutoff Grade Mining Recovery Proven Reserves 22,291 96.0(CaCO 3 ) 81% ​ 22,873 96.0(CaCO 3 ) 81% Probable Reserves - 96.0(CaCO 3 ) 81% ​ - 96.0(CaCO 3 ) 81% Total Mineral Reserves 22,291 96.0(CaCO 3 ) 81% ​ 22,873 96.0(CaCO 3 ) 81% ​ Carthage operates the Carthage Mine and has crushed limestone production facilities located on approximately 800 acres that it owns containing high-quality limestone.
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.
During 2023, the Company’s utilization rate was approximately 66% of its total annual production capacity for the plants in its Lime and Limestone Operations. U.S.
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.
PLS (also referred to as ground calcium carbonate) 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.
The equipment has the capacity to produce approximately 900 thousand tons annually. 6 Table of Contents 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.
The Mill Creek plant has facilities located next to the Mill Creek Quarry that produce 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.
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.
The QP was not retained to prepare estimates at Carthage, Mill Creek, or Colorado because the Company had not completed a drilling program sufficient to enable the QP to prepare estimates of the limestone mineral resources and reserves at those properties.
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.
While the proposed rule has not been finalized, 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.
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.
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.
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.
The Company believes that its modernization and expansion projects in Texas, Arkansas, and Oklahoma and its recent acquisitions, along with its lime slurry operations in Texas, should allow it to continue to remain competitive, protect its markets and position itself for the future.
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 as of December 31, 2021 Resource Category Resources (tons) Cutoff Grade Processing Recovery ​ Resources (tons) Cutoff Grade Processing Recovery Measured Mineral Resources 114,838,000 96.0(CaCO 3 ) N/A ​ 116,533,000 96.0(CaCO 3 ) N/A Indicated Mineral Resources - - N/A ​ - - N/A Total Measured + Indicated 114,838,000 96.0(CaCO 3 ) N/A ​ 116,533,000 96.0(CaCO 3 ) N/A ​ ​ ​ ​ ​ ​ ​ 3 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Texas Lime Quarry - Summary of Limestone Mineral Reserves as of December 31, 2022 as of December 31, 2021 Resource Category Reserves (tons) Cutoff Grade Mining Recovery ​ Reserves (tons) Cutoff Grade Mining Recovery Proven Reserves 61,564,000 96.0(CaCO 3 ) 95% ​ 63,174,000 96.0(CaCO 3 ) 95% Probable Reserves 47,532,000 96.0(CaCO 3 ) 95% ​ 47,532,000 96.0(CaCO 3 ) 95% Total Mineral Reserves 109,096,000 96.0(CaCO 3 ) 95% ​ 110,706,000 96.0(CaCO 3 ) 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”).
The following is a map of the Texas Lime Quarry location: 4 Table of Contents The tables below summarize the limestone mineral resources and reserves at the Texas Lime Quarry as of December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ Texas Lime Quarry - Summary of Limestone Mineral Resources - Exclusive of Mineral Reserves (in thousands of tons) as of December 31, 2023 as of December 31, 2022 Resource Category Resources (tons) Cutoff Grade Processing Recovery ​ Resources (tons) Cutoff Grade Processing Recovery Measured Mineral Resources - 96.0(CaCO 3 ) N/A ​ - 96.0(CaCO 3 ) N/A Indicated Mineral Resources - - N/A ​ - - N/A Total Measured + Indicated Resources - 96.0(CaCO 3 ) N/A ​ - 96.0(CaCO 3 ) N/A ​ ​ ​ ​ ​ ​ ​ ​ ​ Texas Lime Quarry - Summary of Limestone Mineral Reserves (in thousands of tons) as of December 31, 2023 as of December 31, 2022 Resource Category Reserves (tons) Cutoff Grade Mining Recovery ​ Reserves (tons) Cutoff Grade Mining Recovery Proven Reserves 59,989 96.0(CaCO 3 ) 95% ​ 61,564 96.0(CaCO 3 ) 95% Probable Reserves 47,532 96.0(CaCO 3 ) 95% ​ 47,532 96.0(CaCO 3 ) 95% Total Mineral Reserves 107,521 96.0(CaCO 3 ) 95% ​ 109,096 96.0(CaCO 3 ) 95% ​ Arkansas Lime owns the Batesville Quarry and has crushed limestone, PLS, quicklime, and hydrated lime production facilities, located on approximately 1,260 acres of land located in Independence County, Arkansas that contains known high- quality limestone mineral resources in a bed averaging 60 feet in thickness.
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.
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.
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 Table of Contents 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.
The Company also receives orders in response to bids that it prepares and submits to current and potential customers. 1 Table of Contents 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), metals producers (including steel producers), environmental customers (including municipal sanitation and water treatment facilities and flue gas treatment processes), roof shingle manufacturers, oil and gas services companies, and poultry producers.
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.
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 .
Most recently, in January 2023, EPA announced its proposed decision to reduce the NAAQS for fine particulate matter. 9 Table of Contents 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.
Such changes, if adopted, could have a material adverse effect on the Company’s financial condition, results of operations, cash flows, and competitive position. 14 Table of Contents 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.
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.
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.
Based on forecasted production levels and recovery rates, the Company estimates that these reserves are sufficient to sustain operations for approximately 24 years.
Based on the current level of production and recovery rates, the Company estimates that these reserves are sufficient to sustain its limestone operations for approximately 65 years.
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.
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. Internal Controls Over Limestone Mineral Resources and Reserves Estimates.
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.
Clair Mine, an underground mine located near Marble City, Oklahoma. Carthage Crushed Limestone (“Carthage”) extracts limestone from the Carthage Mine, an underground mine located in Carthage, Missouri. Colorado Lime Company (“Colorado Lime”) owns property containing limestone deposits at Monarch Pass, Colorado.
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 2005, the Company acquired the Love Hollow Quarry, which is owned by ACT and associated with Arkansas Lime, located on approximately 2,500 acres of land in Izard County, Arkansas.
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.
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.
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.
Lime slurry (milk of lime) is a suspended solution of calcium hydroxide produced by mixing quicklime with water in a lime slaker. Crushed limestone is used primarily in construction aggregates.
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 Company engaged SYB Group, LLC (“SYB”) to serve as the Qualified Person (“QP”) to prepare estimates of the Company’s limestone mineral resources and reserves, as of December 31, 2021, at its quarries and mines at Texas Lime, Batesville, Love Hollow, and St.
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.
The agreement for the Arkansas facilities expires in January 2029. 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.
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 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 Carthage Mine that produce both crushed limestone and PLS. The equipment has the capacity to produce approximately 900 thousand tons annually.
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.
The Company produces and distributes crushed limestone, PLS, and quicklime products at five 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.
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.
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 quicklime and hydrated lime requires significant volumes of water. The Company operates multiple groundwater wells to provide water to its plants.
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.
Existing crushed limestone 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.
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.
The Company has 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.
Clair Mine - Summary of Limestone Mineral Resources as of December 31, 2022 as of December 31, 2021 Resource Category Resources (tons) Cutoff Grade Processing Recovery ​ Resources (tons) Cutoff Grade Processing Recovery Measured Mineral Resources 36,039,000 96.0(CaCO 3 ) N/A ​ 36,648,000 96.0(CaCO 3 ) N/A Indicated Mineral Resources 129,747,000 96.0(CaCO 3 ) N/A ​ 129,747,000 96.0(CaCO 3 ) N/A Total Measured + Indicated 165,786,000 96.0(CaCO 3 ) N/A ​ 166,395,000 96.0(CaCO 3 ) N/A ​ ​ ​ ​ ​ ​ ​ ​ ​ St.
Clair Mine - Summary of Limestone Mineral Resources - Exclusive of Mineral Reserves (in thousands of tons) as of December 31, 2023 as of December 31, 2022 Resource Category Resources (tons) Cutoff Grade Processing Recovery ​ Resources (tons) Cutoff Grade Processing Recovery Measured Mineral Resources 7,801 96.0(CaCO 3 ) N/A ​ 7,801 96.0(CaCO 3 ) N/A Indicated Mineral Resources 129,747 96.0(CaCO 3 ) N/A ​ 129,747 96.0(CaCO 3 ) N/A Total Measured + Indicated Resources 137,548 96.0(CaCO 3 ) N/A ​ 137,548 96.0(CaCO 3 ) N/A ​ 9 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ St.
The tables below summarize the limestone mineral resources and reserves at the Love Hollow Quarry as of December 31, 2022 and 2021. ​ ​ ​ ​ 4 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Love Hollow Quarry - Summary of Limestone Mineral Resources as of December 31, 2022 as of December 31, 2021 Resource Category Resources (tons) Cutoff Grade Processing Recovery ​ Resources (tons) Cutoff Grade Processing Recovery Measured Mineral Resources 115,741,000 96.0(CaCO 3 ) N/A ​ 115,802,000 96.0(CaCO 3 ) N/A Indicated Mineral Resources - - N/A ​ - - N/A Total Measured + Indicated 115,741,000 96.0(CaCO 3 ) N/A ​ 115,802,000 96.0(CaCO 3 ) N/A ​ ​ ​ ​ ​ ​ ​ ​ ​ Love Hollow Quarry - Summary of Limestone Mineral Reserves as of December 31, 2022 as of December 31, 2021 Resource Category Reserves (tons) Cutoff Grade Mining Recovery 1 ​ Reserves (tons) Cutoff Grade Mining Recovery 1 Proven Reserves 68,442,000 96.0(CaCO 3 ) 95%/75% ​ 68,500,000 96.0(CaCO 3 ) 95%/75% Probable Reserves 21,047,000 96.0(CaCO 3 ) 95%/75% ​ 21,047,000 96.0(CaCO 3 ) 95%/75% Total Mineral Reserves 89,489,000 96.0(CaCO 3 ) 95%/75% ​ 89,547,000 96.0(CaCO 3 ) 95%/75% 1 Mining recovery is listed as open pit/underground recovery. ​ St.
Based on forecasted production levels and recovery rates, the Company estimates that these reserves are sufficient to sustain its limestone operations for approximately 80 years The following is a map of the Love Hollow Quarry: 7 Table of Contents ​ The tables below summarize the limestone mineral resources and reserves at the Love Hollow Quarry as of December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ Love Hollow Quarry - Summary of Limestone Mineral Resources - Exclusive of Mineral Reserves (in thousands of tons) as of December 31, 2023 as of December 31, 2022 Resource Category Resources (tons) Cutoff Grade Processing Recovery ​ Resources (tons) Cutoff Grade Processing Recovery Measured Mineral Resources 10,392 96.0(CaCO 3 ) N/A ​ 10,392 96.0(CaCO 3 ) N/A Indicated Mineral Resources - - N/A ​ - - N/A Total Measured + Indicated Resources 10,392 96.0(CaCO 3 ) N/A ​ 10,392 96.0(CaCO 3 ) N/A ​ ​ ​ ​ ​ ​ ​ ​ ​ Love Hollow Quarry - Summary of Limestone Mineral Reserves (in thousands of tons) as of December 31, 2023 as of December 31, 2022 Resource Category Reserves (tons) Cutoff Grade Mining Recovery (1) ​ Reserves (tons) Cutoff Grade Mining Recovery (1) Proven Reserves 68,176 96.0(CaCO 3 ) 95%/75% ​ 68,442 96.0(CaCO 3 ) 95%/75% Probable Reserves 21,047 96.0(CaCO 3 ) 95%/75% ​ 21,047 96.0(CaCO 3 ) 95%/75% Total Mineral Reserves 89,223 96.0(CaCO 3 ) 95%/75% ​ 89,489 96.0(CaCO 3 ) 95%/75% (1) Mining recovery is listed as open-pit/underground recovery ​ St.
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.
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.
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 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.
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.
As of December 31, 2023, the Batesville Quarry had a net book value of $4.1 million. As of December 31, 2023, the Batesville Quarry had 8.2 million tons of indicated limestone mineral resources, 7.4 million tons of proven limestone mineral reserves, and 3.5 million tons of probable limestone mineral reserves.
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.
Clair and U.S. Lime Company-Transportation. The Company produces high-quality limestone from its open- pit quarries and underground mines that it sells as crushed limestone or processes further to produce several higher-value lime and limestone products, including pulverized limestone (“PLS”), quicklime, hydrated lime, and lime slurry.
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 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 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.
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 650 thousand tons of quicklime.
In addition, Carthage has the right to mine the high-quality limestone contained in approximately 760 adjacent acres pursuant to long-term mineral leases.
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 operates the Mill Creek Quarry and production facilities located on approximately 570 acres that it owns where it mines and processes crushed dolomitic limestone.
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.
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 resources are presented exclusive of limestone mineral reserves.
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”).
For additional information with respect to the Material Properties, see the TRSs prepared by SYB, updated as of December 31, 2023, in Exhibits 96.1-96.4 to this Report on Form 10-K. 3 Table of Contents Texas Lime owns the Texas Lime Quarry and has crushed limestone, PLS, quicklime, and hydrated lime production facilities, located on approximately 5,200 acres of land in Johnson County, Texas that contains known high- quality limestone mineral resources in a bed averaging 25 to 35 feet in thickness.
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 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 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 as of December 31, 2021 Resource Category Resources (tons) Cutoff Grade Processing Recovery Resources (tons) Cutoff Grade Processing Recovery Measured Mineral Resources 14,921,000 96.0(CaCO 3 ) N/A ​ 16,010,000 96.0(CaCO 3 ) N/A Indicated Mineral Resources 8,239,000 96.0(CaCO 3 ) N/A ​ 8,239,000 96.0(CaCO 3 ) N/A Total Measured + Indicated 23,160,000 96.0(CaCO 3 ) N/A ​ 24,249,000 96.0(CaCO 3 ) N/A ​ ​ ​ ​ ​ ​ ​ ​ ​ Batesville Quarry - Summary of Limestone Mineral Reserves as of December 31, 2022 as of December 31, 2021 Resource Category Reserves (tons) Cutoff Grade Mining Recovery 1 ​ Reserves (tons) Cutoff Grade Mining Recovery 1 Proven Reserves 8,192,000 96.0(CaCO 3 ) 82%/75% ​ 9,085,000 96.0(CaCO 3 ) 82%/75% Probable Reserves 3,458,000 96.0(CaCO 3 ) 82%/75% ​ 3,458,000 96.0(CaCO 3 ) 82%/75% Total Mineral Reserves 11,650,000 96.0(CaCO 3 ) 82%/75% ​ 12,543,000 96.0(CaCO 3 ) 82%/75% 1 Mining recovery is listed as open pit/underground recovery.
Based on forecasted production levels and recovery rates, the Company estimates that these reserves are sufficient to sustain its limestone operations for approximately 20 years. 5 Table of Contents The following is a map of the Batesville Quarry location: ​ The tables below summarize the limestone mineral resources and reserves at the Batesville Quarry as of December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ Batesville Quarry - Summary of Limestone Mineral Resources - Exclusive of Mineral Reserves (in thousands of tons) as of December 31, 2023 as of December 31, 2022 Resource Category Resources (tons) Cutoff Grade Processing Recovery Resources (tons) Cutoff Grade Processing Recovery Measured Mineral Resources - 96.0(CaCO 3 ) N/A ​ - 96.0(CaCO 3 ) N/A Indicated Mineral Resources 8,239 96.0(CaCO 3 ) N/A ​ 8,239 96.0(CaCO 3 ) N/A Total Measured + Indicated Resources 8,239 96.0(CaCO 3 ) N/A ​ 8,239 96.0(CaCO 3 ) N/A ​ 6 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Batesville Quarry - Summary of Limestone Mineral Reserves (in thousands of tons) as of December 31, 2023 as of December 31, 2022 Resource Category Reserves (tons) Cutoff Grade Mining Recovery (1) ​ Reserves (tons) Cutoff Grade Mining Recovery (1) Proven Reserves 7,407 96.0(CaCO 3 ) 82%/75% ​ 8,192 96.0(CaCO 3 ) 82%/75% Probable Reserves 3,458 96.0(CaCO 3 ) 82%/75% ​ 3,458 96.0(CaCO 3 ) 82%/75% Total Mineral Reserves 10,865 96.0(CaCO 3 ) 82%/75% ​ 11,650 96.0(CaCO 3 ) 82%/75% (1) Mining recovery is listed as open-pit/underground recovery.
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.
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 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.
The Company has four subsidiaries that extract limestone from open-pit quarries: Texas Lime Company (“Texas Lime”), which operates the Texas Lime Quarry and is located near Cleburne, Texas; Arkansas Lime Company (“Arkansas Lime”), which operates the Batesville Quarry and is located near Batesville, Arkansas; ACT Holdings, Inc.
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.
Updates to the TRSs did not have a material effect on any of the Company’s mineral resources or reserves. Summaries of the Company’s total limestone mineral resources and reserves for all Material Properties as of December 31, 2023 and 2022 are shown below.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeTo 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.
Biggest changeMaterial increases in the price of diesel could have a material adverse effect on the Company’s profitability. 18 Table of Contents To maintain our competitive position in the lime and limestone industry, we may need to continue to increase the efficiency of our operations, expand production capacity, and sell any resulting increased production at acceptable prices.
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.
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 companies to purchase carbon credits, or other measures that would require reductions in emissions or changes to raw materials, fuel use, or production rates.
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.
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 inflationary expectations, 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.
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. ​ 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.
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. ​ Our lime and limestone operations are subject to various mine safety and reclamation and remediation obligations. ​ Our mining operations are subject to mine safety regulation under the Mine Act.
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.
Specifically, demand from our utility customers has decreased due to the continuing trend in the United States to retire coal-fired utility plants. Our construction, steel, and oil and gas services customers reduce their purchase volumes, at times, due to cyclical economic conditions in their industries.
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.
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.
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.
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 downgrades and potential U.S. government defaults 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.
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. 13 Table of Contents The lime and limestone industry is highly regionalized and competitive.
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. 17 Table of Contents The lime and limestone industry is highly regionalized and competitive.
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.
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, excessive rains, flooding, ice storms, freezing weather, drought, and other natural events, that may affect operations, transportation, fuel supply, or customers.
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.
We may be limited in our ability to insure against certain risk of our operations. Mining limestone and producing lime and limestone products involve risks which could result in damage to our facilities, personal injury, and environmental damage.
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.
If we are unable to continue to pass along our increasing energy, labor, and parts and supplies 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.
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.
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 cybersecurity risks and incidents.
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. 16 Table of Contents ​ We intend to comply with all Environmental Laws and believe our accrual for environmental costs and liabilities at December 31, 2022, is reasonable.
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. ​ 20 Table of Contents We intend to comply with all Environmental Laws and believe our accrual for environmental costs and liabilities at December 31, 2023 is reasonable.
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 15 Table of Contents 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.
A pandemic, epidemic, or disease outbreak 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 19 Table of Contents 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.
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.
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 cybersecurity risks or incidents.
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.
We are in a period of economic and regulatory uncertainty, which has been heightened by the current divides in the branches of the United States federal government and the upcoming federal elections.
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.
Business and Financial Risks In the normal course of our Lime and Limestone Operations, we face various business and financial risks, including increased energy, labor, and parts and supplies costs, 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.
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.
To the extent any such cybersecurity threat or incident 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.
Additionally, should we experience a cybersecurity incident, we may incur substantial costs, including remediation costs, such as liability for stolen assets or information, repairs of system damage, legal expenses, and losses and costs associated with regulatory actions.
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.
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.
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.
Our cybersecurity processes are focused on the prevention, detection, mitigation, and remediation of damage from computer viruses, natural disasters, unauthorized access, cyber- attack, and other cybersecurity risks and threats. However, our cybersecurity processes may not be successful in preventing unauthorized access, intrusion, disclosure, and damage.
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.
There can be no assurance that any of these actions, if adopted, will not increase costs for our customers or increase our cost of compliance with zoning and land use, mine permitting and operating, mine safety, reclamation and remediation, and environmental laws.
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.
Any failure, threat, or incident involving our IT systems could adversely impact our mining and manufacturing operations, sales or financial and administrative functions, or result in the compromise of personal or other confidential information of our employees, customers, or suppliers.
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.
Risks and threats to our systems can derive from human error, fraud, or malice on the part of employees or third parties, ransomware, or technological failure.
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 COVID-19 pandemic had an impact on our business and operations, particularly as it related to rising costs and supply chain delays and disruptions. New or future variants of the COVID-19 virus or other pandemics, epidemics, or disease outbreaks and governmental responses to such events could similarly disrupt our business and operations.
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.
Recent events, such as the ongoing conflicts in Ukraine, Israel, and the broader Middle East, and the sanctions and other actions resulting therefrom, could further increase our energy costs.
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 14 Table of Contents available to us at all or at reasonable interest rates or on acceptable terms.
We have in the past, and may in the future, undertake additional modernization and expansion and development projects and acquisitions.
Removed
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.
Removed
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.
Removed
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.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeAs 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. ​
Biggest changeAs disclosed in Note 2 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 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

3 edited+0 added−0 removed2 unchanged
Biggest changeThe Company seeks to accomplish this by: training employees in safe work practices; openly 17 Table of Contents 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.
Biggest changeThe 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. 22 Table of Contents 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.
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.
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, 2023 is presented in Exhibit 95.1 to this Report on Form 10-K.
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. PART II
There has also been an increase in the dollar penalties assessed for citations and orders issued in recent years. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeLIME & MINERALS, INC. 100.00 92.74 125.27 159.30 181.12 198.94 ​ NASDAQ COMPOSITE INDEX 100.00 97.16 132.81 192.47 235.15 158.65 ​ PEER GROUP ​ 100.00 ​ 54.00 ​ 80.14 ​ 81.94 ​ 133.30 ​ 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.
Biggest changeLIME & MINERALS, INC. 100.00 135.07 171.77 195.29 214.51 352.51 ​ NASDAQ COMPOSITE INDEX 100.00 136.69 198.10 242.03 163.28 236.17 ​ PEER GROUP ​ 100.00 ​ 148.39 ​ 151.73 ​ 246.83 ​ 192.64 ​ 271.19 ​ ​ The 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.
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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2017 2018 2019 2020 2021 2022 U.S.
The graph assumes that the value of the investment in the Company’s common stock and each index was $100 on December 31, 2018, and that all cash dividends, including the special cash dividend paid in the fourth quarter 2019, have been reinvested. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2018 2019 2020 2021 2022 2023 U.S.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUIT Y, 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.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUIT Y, 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 27, 2024, 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. 18 Table of Contents 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.
As of February 27, 2024, the Company had 500,000 shares of $5.00 par value preferred stock authorized; however, none has been issued. 23 Table of Contents 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 customized peer group index consisting of Eagle Materials, Inc., Mineral Technologies, Inc., and Summit Materials Inc.
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. 19 Table of Contents ​ ITEM 6. [RESERVED ]
Pursuant to these provisions, the Company repurchased 4,918 shares at a price of $230.35 per share, the fair market value of one share on the date they were tendered to the Company, in the fourth quarter 2024 for payment of tax withholding liability upon the lapse of restrictions on restricted stock. ​ ITEM 6. [RESERVED ] ​ 24 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

61 edited+10 added−11 removed26 unchanged
Biggest changeSet forth below is certain selected financial data for the five years ended December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2022 2021 2020 2019 2018 ​ ​ (dollars in thousands, except per share amounts) Operating results ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lime and limestone revenues ​ $ 233,421 187,365 159,707 156,981 141,922 ​ Other revenues ​ 2,729 1,890 997 1,296 2,513 ​ Total revenues ​ $ 236,150 189,255 160,704 158,277 144,435 ​ Gross profit ​ $ 70,342 59,260 47,587 41,676 30,486 ​ Operating profit (1) ​ $ 54,783 46,417 33,869 29,246 20,002 ​ Income before income tax expense ​ $ 56,562 46,518 34,072 30,900 21,568 ​ Income tax expense ​ $ 11,133 ​ 9,473 ​ 5,849 ​ 4,844 ​ 1,883 ​ Net income ​ $ 45,429 37,045 28,223 26,056 19,685 ​ Net income per share of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 8.01 6.55 5.01 4.64 3.52 ​ Diluted ​ $ 8.00 ​ 6.54 ​ 5.00 ​ 4.64 ​ 3.51 ​ Dividends per share of common stock (2) ​ $ 0.80 0.64 0.64 5.89 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.
Biggest changeSet forth below is certain selected financial data for the five years ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 2022 2021 2020 2019 ​ ​ (dollars in thousands, except per share amounts) Operating results ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lime and limestone revenues ​ $ 280,202 233,421 187,365 159,707 156,981 ​ Other revenues ​ 1,128 2,729 1,890 997 1,296 ​ Total revenues ​ $ 281,330 236,150 189,255 160,704 158,277 ​ Gross profit ​ $ 102,867 70,342 59,260 47,587 41,676 ​ Other (income) expense, net ​ $ (7,940) (1,779) (101) 11 (203) ​ Income tax expense ​ $ 18,813 ​ 11,133 ​ 9,473 ​ 5,849 ​ 4,844 ​ Net income ​ $ 74,549 45,429 37,045 28,223 26,056 ​ Net income per share of common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 13.10 8.01 6.55 5.01 4.64 ​ Diluted ​ $ 13.06 ​ 8.00 ​ 6.54 ​ 5.00 ​ 4.64 ​ Dividends per share of common stock (1) ​ $ 0.80 0.80 0.64 0.64 5.89 ​ (1) Dividends per share of common stock for 2019 included a special dividend of $5.35 per share. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2023 2022 2021 2020 2019 Total assets ​ $ 440,602 367,772 279,098 247,037 244,671 ​ Stockholders’ equity per outstanding common share ​ $ 68.91 56.51 49.10 43.06 38.62 ​ Employees ​ 333 338 308 317 282 ​ ​ General.
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.
Net cash used in investing activities for 2022 included $5.6 million for the acquisition of Mill Creek and an additional $3.5 million of 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.
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 may pay dividends so long as we remain in compliance with the provisions of our credit agreement, and we may purchase, redeem, or otherwise acquire shares of our common stock so long as our pro forma Cash Flow Leverage 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 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.
The Revolving Facility interest rate margins and commitment fee are determined quarterly in accordance with a pricing grid based upon our Cash Flow Leverage Ratio, defined as the ratio of our total funded senior indebtedness to earnings before interest, taxes, depreciation, depletion, amortization, and stock-based compensation expense (“EBITDA”) for the 12 months ended on the last day of the most recent calendar quarter, plus pro forma EBITDA from any businesses acquired during the period.
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.
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 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.
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.
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 increased regular cash dividends for the near future. Off-Balance Sheet Arrangements.
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.
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 acquisitions of Carthage and Mill Creek, as well as operating existing facilities efficiently.
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.
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, economic, and other factors.
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.
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.
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.
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, cybersecurity, 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.
Our modernization and expansion and development projects have also equipped us with 22 Table of Contents 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.
Our modernization and expansion and development projects have also equipped us with up-to-date, fuel-efficient plant facilities, which have resulted in lower production costs and greater operating efficiencies, 27 Table of Contents thus enhancing our competitive position. All of our rotary kilns are now fuel-efficient preheater kilns, and the addition of the vertical kiln at St.
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.
We expect to spend approximately $22.0 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.
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.
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 2023.
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 23 Table of Contents the following critical accounting policies require the most significant management estimates and judgments used in the preparation of our consolidated financial statements. Contingencies.
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 the following critical accounting policies require the most significant management estimates and judgments used in the preparation of our consolidated financial statements. 28 Table of Contents Contingencies.
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.
Pursuant to a security agreement, dated August 25, 2004, the Revolving Facility is secured by our existing and hereafter acquired tangible assets, intangible assets, and real property. The maturity of the Revolving Facility and any incremental loans can be accelerated if any event of default, as defined under the credit agreement, occurs.
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 27 Table of Contents offset by a $2.8 million increase in accounts payable, accrued expenses and other liabilities.
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, and 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 offset by a $2.8 million increase in accounts payable and accrued expenses, and other liabilities.
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. 24 Table of Contents RESULTS OF OPERATIONS.
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. RESULTS OF OPERATIONS.
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. ​ 20 Table of Contents OVERVIEW.
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 cybersecurity threats and incidents, 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, downgrades and defaults on U.S. government obligations, pandemics, trade wars, tariffs, international incidents, including conflicts in Ukraine, Israel, and the broader Middle East, 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, labor, parts and supplies, and changes in inflationary expectations; (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 resources and reserves and remaining lives of reserves; (x) the impact of potential global pandemics, epidemics, or disease outbreaks, such as COVID 19, 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. ​ 25 Table of Contents OVERVIEW.
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.
Inclement weather conditions, such as winter ice and snowstorms, freezing 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.
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.
Net cash used in financing activities primarily consisted of $4.6 million for dividend payments and $1.3 million to repurchase shares of our common stock in 2023, compared to $4.5 million for dividend payments and $0.8 million to repurchase shares of our common stock in 2022.
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.
We spent $1.3 million, $0.8 million, and $0.7 million in 2023, 2022, and 2021, 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.
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.
Our effective income tax rates for 2023 and 2022 were reduced from the statutory rate primarily due to statutory depletion in excess of basis.
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.
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.
Clair in 2019 further increased the fuel efficiency of our fleet of kilns.
Clair further increased the fuel efficiency of our fleet of kilns.
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.
Our cash and cash equivalents at December 31, 2023 increased to $188.0 million from $133.4 million at December 31, 2022. Banking Facilities and Debt. Our credit agreement with Wells Fargo Bank, N.A.
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.
Interest rates on the Revolving Facility are, at our option, SOFR, plus a SOFR adjustment rate of 0.10%, 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 0.225% to 0.350% on the undrawn portion of the Revolving Facility.
(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 “Lender”), as amended as of August 3, 2023, 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.
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%.
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%.
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.
Absent a significant acquisition opportunity arising during 2024, we anticipate funding our operating and capital needs and our increased regular cash dividends 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 crushed limestone, PLS, aggregate, quicklime, hydrated lime and lime slurry.
The following table sets forth certain financial information expressed as a percentage of revenues for the three years ended December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 2021 2020 ​ Lime and limestone revenues 98.8 % 99.0 % 99.4 % ​ Other revenues 1.2 ​ 1.0 ​ 0.6 ​ ​ Total revenues 100.0 ​ 100.0 ​ 100.0 ​ ​ Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ Labor and other operating expenses (60.9) ​ (57.8) ​ (58.3) ​ ​ Depreciation, depletion and amortization (9.3) ​ (10.9) ​ (12.1) ​ ​ Gross profit 29.8 ​ 31.3 ​ 29.6 ​ ​ Selling, general and administrative expenses (6.6) ​ (6.8) ​ (7.6) ​ ​ Impairment of long-lived assets — ​ — ​ (1.0) ​ ​ Operating profit 23.2 ​ 24.5 ​ 21.1 ​ ​ Other (expense) income: ​ ​ ​ ​ ​ ​ ​ ​ Interest expense (0.1) ​ (0.1) ​ (0.2) ​ ​ Interest and other income, net 0.8 ​ 0.2 ​ 0.3 ​ ​ Income tax expense (4.7) ​ (5.0) ​ (3.6) ​ ​ Net income 19.2 % 19.6 % 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%.
The following table sets forth certain financial information expressed as a percentage of revenues for the three years ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 2022 2021 ​ Lime and limestone revenues 99.6 % 98.8 % 99.0 % ​ Other revenues 0.4 ​ 1.2 ​ 1.0 ​ ​ Total revenues 100.0 ​ 100.0 ​ 100.0 ​ ​ Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ Labor and other operating expenses (55.1) ​ (60.9) ​ (57.8) ​ ​ Depreciation, depletion and amortization (8.3) ​ (9.3) ​ (10.9) ​ ​ Gross profit 36.6 ​ 29.8 ​ 31.3 ​ ​ Selling, general and administrative expenses (6.2) ​ (6.6) ​ (6.8) ​ ​ Operating profit 30.4 ​ 23.2 ​ 24.5 ​ ​ Other income, net ​ 2.8 ​ 0.7 ​ 0.1 ​ ​ Income tax expense (6.7) ​ (4.7) ​ (5.0) ​ ​ Net income 26.5 % 19.2 % 19.6 % ​ 2023 vs. 2022 Our revenues for 2023 increased to $281.3 million from $236.2 million in 2022, an increase of $45.2 million, or 19.1%.
(2) Of these obligations, $1,079 were recorded on the Consolidated Balance Sheet at December 31, 2022.
(2) Of these obligations, $1,196 were recorded on the Consolidated Balance Sheet at December 31, 2023.
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.
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 August 3, 2028 .
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.
It also enabled us to pay $4.6 million in dividends in 2023 and increase our cash balances to $188.0 million as of December 31, 2023, compared to $133.4 million as of December 31, 2022. As of December 31, 2023 and 2022, we had no debt outstanding.
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%.
As of December 31, 2023, we had $1.3 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 $92.3 million in 2023, compared to $64.4 million in 2022, an increase of $27.9 million, or 43.3%.
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.
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 overall inflationary environment. In 2023, we began to experience an increase in DD&A expense associated with higher recurring capital and re-equipping projects, which we expect will continue in future periods.
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.
The increase in revenues from our Lime and Limestone Operations in 2022 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, 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.
In addition, 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.
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%.
In addition, we realized a 10.6% increase in average selling 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.
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.
Other. Revenues in 2023 included $1.1 million from our natural gas interests, compared to $2.7 million in 2022. Gross (loss) profit from our natural gas interests was a $38 thousand loss in 2023, compared to a $1.4 million profit in 2022. CRITICAL ACCOUNTING POLICIES AND ESTIMATES.
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 2023, net cash provided by operating activities was principally composed of $74.5 million net income, $23.8 million DD&A, and $3.2 million stock-based compensation, partially offset by a $0.9 million decrease in deferred income taxes and an $8.8 million decrease from changes in working capital.
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.
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.
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. 28 Table of Contents Common Stock Buybacks.
At December 31, 2023, we had no debt outstanding and no draws on the Revolving Facility other than $0.5 million of letters of credit, which count as draws against the available commitment under the Revolving Facility. ​ 32 Table of Contents Common Stock Buybacks.
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.
Gross profit from our Lime and Limestone Operations in 2023 increased 49.2%, compared to 2022, primarily due to the increased revenues discussed above, partially offset by increased lime and limestone production costs, principally from higher energy, labor, and parts and supplies costs.
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.
Net income per fully diluted share increased to $13.06 in 2023, compared to $8.00 in 2022. Cash flows from operations enabled us to make $34.3 million of capital investments in 2023.
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. 25 Table of Contents 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.
Other (income) expense, net was $1.8 million income in 2022, compared to $0.1 million income in 2021, an increase of $1.7 million, or 1,661.4%. The increase in other income, net in 2022, compared to 2021, was due to higher interest rates on higher average balances in our cash and cash equivalents.
The following table sets forth our contractual obligations as of December 31, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period ​ ​ ​ ​ ​ ​ More Than Contractual Obligations ​ Total ​ 1 Year ​ 2 - 3 Years ​ 4 - 5 Years ​ 5 Years Debt ​ $ — — — — — ​ Operating leases (1) ​ $ 5,842 1,408 2,436 1,749 249 ​ Limestone mineral leases ​ $ 2,418 97 195 302 1,824 ​ Purchase obligations (2)(3) ​ $ 22,397 21,719 678 — — ​ Other liabilities ​ $ 1,556 120 248 245 943 ​ Total ​ $ 32,213 23,344 3,557 2,296 3,016 ​ (1) Represents operating leases for railcars, corporate office space and some equipment that are either non-cancelable or subject to significant penalty upon cancellation.
The following table sets forth our contractual obligations as of December 31, 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period ​ ​ ​ ​ ​ ​ More Than Contractual Obligations ​ Total ​ 1 Year ​ 2 - 3 Years ​ 4 - 5 Years ​ 5 Years Operating leases (1) ​ $ 5,872 1,721 2,723 1,328 100 ​ Limestone mineral leases ​ $ 2,267 97 194 302 1,674 ​ Purchase obligations (2)(3) ​ $ 23,687 21,073 2,614 — — ​ Other liabilities ​ $ 1,548 120 240 240 948 ​ Total ​ $ 33,374 23,011 5,771 1,870 2,722 ​ (1) Represents operating leases for railcars, corporate office space, and some equipment that are either non-cancelable or subject to significant penalty upon cancellation.
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 was $32.0 million for 2023, compared to $31.2 million for 2022. Net cash used in investing activities for 2023 included $11.0 million for real property purchases.
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.
In 2023, the 31 Table of Contents changes in working capital were principally composed of a $4.5 million increase in trade receivables, net, primarily as a result of increased sales in the fourth quarter 2023, compared to the fourth quarter 2022, a $4.7 million increase in inventories, primarily due to increases in the volume of our solid fuel stockpiles and the costs of our supply of critical parts, and a $1.1 million increase in prepaid expenses and other current assets, partially offset by a $1.7 million increase in accounts payable and accrued expenses.
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.
In 2021, the United States Congress passed the Infrastructure Investment and Jobs Act, which is estimated to apportion approximately $27.5 billion to Texas for federal-aid highway programs, of which $16.6 billion has been announced for roads, bridges, roadway safety, and major projects.
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%.
Net income increased to $74.5 million ($13.06 per share diluted) in 2023, compared to $45.4 million ($8.00 per share diluted) in 2022, an increase of $29.1 million, or 64.1%. 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%.
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%. ​ 26 Table of Contents Summary of Quarterly Financial Data (dollars in thousands except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ ​ March 31, ​ June 30, ​ September 30, ​ December 31, Revenues ​ ​ ​ ​ ​ Lime and limestone operations ​ $ 50,296 ​ $ 59,613 ​ $ 65,699 ​ $ 57,813 ​ Other ​ 613 ​ 879 ​ 758 ​ 479 ​ ​ ​ $ 50,909 ​ $ 60,492 ​ $ 66,457 ​ $ 58,292 ​ Gross profit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lime and limestone operations ​ $ 14,197 ​ $ 15,975 ​ $ 22,166 ​ $ 16,613 ​ Other ​ 270 ​ 506 ​ 424 ​ 191 ​ ​ ​ $ 14,467 ​ $ 16,481 ​ $ 22,590 ​ $ 16,804 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 8,668 ​ $ 10,238 ​ $ 15,726 ​ $ 10,797 ​ Basic income per common share ​ $ 1.53 ​ $ 1.80 ​ $ 2.77 ​ $ 1.90 ​ Diluted income per common share ​ $ 1.53 ​ $ 1.80 ​ $ 2.77 ​ $ 1.90 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ ​ March 31, ​ June 30, ​ September 30, ​ December 31, Revenues ​ ​ ​ ​ ​ Lime and limestone operations ​ $ 41,356 ​ $ 48,742 ​ $ 51,749 ​ $ 45,518 ​ Other ​ 318 ​ 420 ​ 562 ​ 590 ​ ​ ​ $ 41,674 ​ $ 49,162 ​ $ 52,311 ​ $ 46,108 ​ Gross profit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lime and limestone operations ​ $ 11,804 ​ $ 16,682 ​ $ 17,128 ​ $ 13,017 ​ Other ​ 1 ​ 113 ​ 213 ​ 302 ​ ​ ​ $ 11,805 ​ $ 16,795 ​ $ 17,341 ​ $ 13,319 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 7,031 ​ $ 11,093 ​ $ 11,308 ​ $ 7,613 ​ Basic income per common share ​ $ 1.24 ​ $ 1.96 ​ $ 2.00 ​ $ 1.35 ​ Diluted income per common share ​ $ 1.24 ​ $ 1.96 ​ $ 1.99 ​ $ 1.34 ​ ​ FINANCIAL CONDITION.
Summary of Quarterly Financial Data (dollars in thousands except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ ​ March 31, ​ June 30, ​ September 30, ​ December 31, Revenues ​ ​ ​ ​ ​ Lime and limestone operations ​ $ 66,538 ​ $ 73,688 ​ $ 74,582 ​ $ 65,394 ​ Other ​ 239 ​ 295 ​ 296 ​ 298 ​ ​ ​ $ 66,777 ​ $ 73,983 ​ $ 74,878 ​ $ 65,692 ​ Gross profit (loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lime and limestone operations ​ $ 24,058 ​ $ 27,121 ​ $ 28,160 ​ $ 23,566 ​ Other ​ (66) ​ 10 ​ (5) ​ 23 ​ ​ ​ $ 23,992 ​ $ 27,131 ​ $ 28,155 ​ $ 23,589 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 17,104 ​ $ 19,712 ​ $ 20,733 ​ $ 17,000 ​ Basic income per common share ​ $ 3.01 ​ $ 3.46 ​ $ 3.64 ​ $ 2.98 ​ Diluted income per common share ​ $ 3.00 ​ $ 3.45 ​ $ 3.63 ​ $ 2.98 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ ​ March 31, ​ June 30, ​ September 30, ​ December 31, Revenues ​ ​ ​ ​ ​ Lime and limestone operations ​ $ 50,296 ​ $ 59,613 ​ $ 65,699 ​ $ 57,813 ​ Other ​ 613 ​ 879 ​ 758 ​ 479 ​ ​ ​ $ 50,909 ​ $ 60,492 ​ $ 66,457 ​ $ 58,292 ​ Gross profit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lime and limestone operations ​ $ 14,197 ​ $ 15,975 ​ $ 22,166 ​ $ 16,613 ​ Other ​ 270 ​ 506 ​ 424 ​ 191 ​ ​ ​ $ 14,467 ​ $ 16,481 ​ $ 22,590 ​ $ 16,804 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 8,668 ​ $ 10,238 ​ $ 15,726 ​ $ 10,797 ​ Basic income per common share ​ $ 1.53 ​ $ 1.80 ​ $ 2.77 ​ $ 1.90 ​ Diluted income per common share ​ $ 1.53 ​ $ 1.80 ​ $ 2.77 ​ $ 1.90 ​ ​ FINANCIAL CONDITION.
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.
The carrying values of the long-lived assets related to our natural gas interests were $0.4 million as of December 31, 2023. 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 19.1% in 2023 compared to 2022.
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.
Our effective income tax rates for 2022 and 2021 were reduced from the statutory rate primarily due to statutory depletion in excess of basis. 30 Table of Contents 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%.
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%.
Our other (income) expense, net was $7.9 million income in 2023, compared to $1.8 million income in 2022, an increase of $6.2 million.
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.
We do not allocate interest income and expense and other expense to our Lime and Limestone Operations.
Revenues in 2022 were also favorably impacted by an increase in average selling prices for our lime and limestone products of 10.6%. 21 Table of Contents Our gross profit increased 18.7% in 2022 compared to 2021.
Revenues from our Lime and Limestone Operations increased 20.0% in 2023, compared to 2022, primarily due to an increase in average selling prices for our lime and limestone products of 21.1%, partially offset by a 1.1% decrease in sales volume.
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.
The increase in gross profit in 2023, compared to 2022, resulted primarily from the increased revenues discussed above, partially offset by increased lime and limestone production costs, principally from higher energy, labor, and parts and supplies costs. Gross profit also included a $38 thousand loss and $1.4 million profit in 2023 and 2022, respectively, from our natural gas interests.
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.
Selling, general and administrative expenses (“SG&A”) increased to $17.4 million for 2023, an increase of $1.9 million, or 12.1%, compared to $15.6 million in 2022. As a percentage of revenues, SG&A was 6.2% in 2023, compared to 6.6% in 2022. The increase in SG&A was primarily due to increased personnel expenses in 2023, compared to 2022.
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%.
Our gross profit increased to $102.9 million for 2023 from $70.3 million in 2022, an increase of $32.5 million, or 46.2%. Gross profit from our Lime and Limestone Operations in 2023 was $102.9 million, compared to $69.0 million in 2022, an increase of $34.0 million, or 49.2%.
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.
The decrease in sales volumes was principally due to decreased demand from our industrial, steel, and construction customers, partially offset by increased demand from our roofing, environmental, and oil and gas services 29 Table of Contents customers. Other revenues included $1.1 million and $2.7 million in 2023 and 2022, respectively, from our natural gas interests.
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.
Texas continues to invest heavily in its transportation, including directing certain sales and use tax revenues, state motor vehicle sales and rental tax revenues, and oil and gas tax revenues to the State Highway Fund, as required under the Texas constitution. In its fiscal 2023, Texas transferred approximately $6.4 billion of such tax revenues to the State Highway Fund.
Removed
(2) Dividends per share of common stock for 2019 included a special dividend of $5.35 per share. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2022 2021 2020 2019 2018 Total assets ​ $ 367,772 279,098 247,037 244,671 228,446 ​ Stockholders’ equity per outstanding common share ​ $ 56.51 49.10 43.06 38.62 39.76 ​ Employees ​ 338 308 317 282 287 ​ ​ General.
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This decrease in demand was primarily from our industrial, steel, and construction customers, partially offset by increased demand from our roofing, environmental, and oil and gas services customers. Our gross profit increased 46.2% in 2023, compared to 2022.
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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.
Added
The increase in other income, net in 2023, compared to 2022, was due to higher interest rates earned on higher average balances in our cash and cash equivalents. 26 Table of Contents Our net income increased $29.1 million, or 64.1%, in 2023, compared to 2022.
Removed
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.
Added
On February 2, 2024, we announced that our Board of Directors had declared an increased regular quarterly cash dividend of $0.25 per share. The dividend is payable on March 15, 2024 to shareholders of record on February 23, 2024.
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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.
Added
Demand for our lime and limestone products from our industrial, steel, and construction customers decreased in 2023; however, this was partially offset by increased demand from our roofing, environmental, and oil and gas services customers. Looking ahead, we anticipate that soft construction demand, particularly from commercial building, will continue through at least the first half 2024.
Removed
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.
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In 2023, we continued to experience rising production costs, especially energy, labor, and parts and supplies costs. As we progressed through 2023, many of the supply chain delays and disruptions that challenged us in the previous year began to resolve .
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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.
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Additionally, for future roadway projects outlined in the Texas Department of Transportation’s 2024 Unified Transportation Program, the state programmed a $15.5 billion increase in funding for a total of $100.6 billion in construction and major maintenance projects planned over the next 10 years.
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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.
Added
Revenues from our Lime and Limestone Operations in 2023 increased $46.8 million, or 20.0%, to $280.2 million from $233.4 million in 2022. The increase in revenues from our Lime and Limestone Operations in 2023 was due to a 21.1% increase in average selling prices for our lime and limestone products, partially offset by a 1.1% decrease in sales volumes.
Removed
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.
Added
Other (income) expense, net was $7.9 million income in 2023, compared to $1.8 million income in 2022, an increase of $6.2 million. The increase in other income, net in 2023 compared to 2022, was due to higher interest rates earned on higher average balances in our cash and cash equivalents.
Removed
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.
Added
Income tax expense was $18.8 million in 2023, for an effective rate of 20.2%, compared to $11.1 million in 2022, for an effective rate of 19.7%, an increase of $7.7 million, primarily due to the increase in income before taxes in 2023, compared to 2022.
Removed
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 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.
Biggest changeITEM 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, 2023.

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