UNITED STATES LIME & MINERALS INC

United States Lime & Minerals, Inc. operates in the lime and limestone industry, supplying construction, industrial, environmental, metals, roof shingle manufacturing, agriculture, and oil and gas services industries. The company produces high-quality limestone from open-pit quarries and underground mines, processing it into crushed limestone, pulverized limestone (PLS), quicklime, hydrated lime, and lime slurry. The industry is highly regionalized and competitive, with high barriers to entry including the scarcity of high-quality limestone deposits, the need for plants to be located close to markets and transportation networks, stringent clean air regulations, and high capital costs. The three largest companies account for more than two-thirds of North American production capacity.

The company's primary competitors are predominantly private companies, with competition based on price, quality, ability to meet customer demands and specifications, proximity to customers, personal relationships, and timeliness of deliveries. The company believes its modernization, expansion, and development projects in Texas, Arkansas, and Oklahoma, its acquisitions in Oklahoma and Missouri, and its lime slurry operations in Texas allow it to remain competitive. The company has approximately 675 customers, with no single customer accounting for more than 10% of sales.

The company generates revenue by manufacturing and selling lime and limestone products, with sales made primarily on a purchase-order basis by nine sales employees. Sales are made within a radius of approximately 400 miles of each plant, and all 2025 sales were within the United States. Customer segments include construction, industrial, environmental, metals, roof shingle manufacturers, agriculture, and oil and gas services companies.

The company's lime and limestone products include crushed limestone used primarily in construction aggregates; PLS used in roof shingles, asphalt paving, agriculture feeds, glass production, soil enhancement, flue gas treatment, and mine safety dust; quicklime used in metal processing, flue gas treatment, soil stabilization, paper manufacturing, and water treatment; hydrated lime used in water treatment, soil stabilization, flue gas treatment, asphalt anti-stripping, oil and gas drilling mud, and chemical production; and lime slurry used in soil stabilization. The Texas Lime plant has annual capacity of approximately 500 thousand tons of quicklime from two preheater rotary kilns and PLS equipment with capacity to produce approximately 800 thousand tons of PLS annually. The Arkansas Lime plant has annual capacity of approximately 650 thousand tons of quicklime from three preheater rotary kilns and PLS capacity of approximately 300 thousand tons annually. The St. Clair plant has annual capacity of approximately 250 thousand tons of quicklime from one vertical kiln and one preheater rotary kiln and PLS capacity of approximately 150 thousand tons annually. The Carthage plant has capacity to produce approximately 900 thousand tons annually of crushed limestone and PLS. The Mill Creek plant has capacity to produce approximately 300 thousand tons annually of dolomitic PLS products. Colorado Lime operates a grinding and bagging facility with annual capacity of approximately 125 thousand tons. During 2025, the company's utilization rate was approximately 80% of total annual production capacity for lime and limestone.

In 2024, the company began construction of a new vertical kiln at the Texas Lime plant, with estimated total construction costs of approximately $65 million. Through December 2025, the company has paid $37.3 million on the Texas kiln project. The company also maintains lime hydrating and bagging equipment at the Texas, Arkansas, and St. Clair plants, and operates lime slurry facilities in the Houston area and Dallas-Fort Worth Metroplex, as well as a distribution terminal in Shreveport, Louisiana.

For the fiscal year ended December 31, 2025, total revenues were $275.1 million ¹, compared to $259.4 million ² in 2024. Net income was $73.2 million ³ in 2025 versus $68.5 million ⁴ in 2024. Diluted earnings per share were $2.55 ⁵ in 2025, compared to $2.39 ⁶ in 2024. The company's profits are very sensitive to changes in sales volumes, prices, and costs.

The company continues to evaluate internal and external opportunities for expansion, growth, and increased profitability as conditions warrant or opportunities arise. The company may revise its strategy or otherwise consider ways to enhance the value of the company, including by entering into strategic partnerships, mergers, or other transactions. The company believes its modernization, expansion, and development projects in Texas, Arkansas, and Oklahoma, its acquisitions in Oklahoma and Missouri, and its lime slurry operations in Texas should allow it to continue to remain competitive, protect its markets, and position itself for the future.

The company is constructing a new vertical kiln at the Texas Lime plant, with estimated total construction costs of approximately $65 million ⁷. Through December 2025, the company has paid $37.3 million ⁸ on the Texas kiln project. This investment is expected to improve operating efficiency and maintain competitiveness.

The company's operations are subject to various federal, state, and local environmental laws and regulations that may materially impact financial condition, results of operations, cash flows, and competitive position. The company incurred capital expenditures related to environmental matters of $1.6 million ⁹ in 2025, $1.0 million ¹⁰ in 2024, and $1.5 million ¹¹ in 2023. Recurring costs associated with managing environmental permitting and waste recycling and disposal and maintaining pollution control equipment amounted to $0.7 million ¹² in 2025, $0.8 million ¹³ in 2024, and $0.9 million ¹⁴ in 2023.

The company's capital allocation strategy includes investing in modernization and expansion projects. The company has paid $37.3 million ¹⁵ through December 2025 on the Texas kiln project, which has an estimated total cost of approximately $65 million ¹⁶. The filing does not disclose specific R&D spending levels, share repurchase authorization amounts, or dividend policy figures beyond the declaration of a quarterly dividend in the subsequent events note.

The company faces structural headwinds including reduced demand from utility customers due to the trend towards reducing reliance on coal-fired utility plants, which has reduced demand for lime and limestone for flue gas treatment processes. Demand from oil and gas services customers has tended to vary with the demand for their products and services, which has continued to be cyclical. The long-term trend has been for utility plants to use more natural gas and renewable energy sources for power generation instead of coal, with the addition of new coal-fired utility plants in the United States being unlikely. These reductions in demand have resulted in increased competitive pressures, including pricing and competition for certain customer accounts.

The company's operations are subject to operating risks beyond its control, including geological formation problems, variability of limestone chemical or physical properties, accidents, equipment failures, strikes, and adverse weather conditions such as hurricanes, tornadoes, excessive rains, flooding, ice storms, freezing weather, drought, wild fires, and earthquakes, which could disrupt operations, decrease production and shipments, and increase operating costs. The lime and limestone industry is highly regionalized and competitive, with the three largest companies accounting for more than two-thirds of North American production capacity, and recent price increases have made the company more susceptible to new entrants and multi-national competition. The company faces business and financial risks from increased energy, labor, and parts and supplies costs that could materially adversely affect financial position and results of operations. Environmental regulations, including the Clean Air Act, Clean Water Act, and Mine Act, impose significant compliance costs, with capital expenditures related to environmental matters of $1.6 million ¹⁷ in 2025, and the company's accrual for asset retirement obligations was $1.4 million ¹⁸ at December 31, 2025. The company's profits are very sensitive to changes in sales volumes, prices, and costs, and reduced demand from utility customers due to the trend away from coal-fired plants and cyclical demand from oil and gas services customers have increased competitive pressures.

Management's message emphasizes the company's commitment to attracting and retaining talent, investing in human capital resources, and maintaining safe and healthy workplace environments. The company's strategic priorities include continuing modernization, expansion, and development projects in Texas, Arkansas, and Oklahoma to remain competitive and position itself for the future. Management will continue to evaluate internal and external opportunities for expansion, growth, and increased profitability, and may consider strategic partnerships, mergers, or other transactions to enhance shareholder value. The employment agreement with the President and CEO, Timothy W. Byrne, was extended until December 31, 2028, and includes an EBITDA cash bonus opportunity under the 2001 Long-Term Incentive Plan, as well as grants of restricted stock, with compensation recovery and share ownership provisions designed to align his interests with long-term stockholders.