United States Lime & Minerals Reports Third Quarter 2013 Results

DALLAS, Oct. 30, 2013

The increase in lime and limestone revenues in the third quarter 2013 as compared to the third quarter 2012 resulted primarily from increased sales volumes of the Company's lime and limestone products due to increased demand, principally from its construction and environmental customers. The decrease in lime and limestone revenues in the first nine months 2013 compared to the comparable 2012 period resulted primarily from decreased demand,  principally  from the Company's steel customers due to the reduction in steel output in the United States and from its oil and gas services customers due to reduced oil and gas drilling activity in the Company's markets, partially offset by increased sales volumes to the Company's construction and environmental customers, and a slight increase in prices realized for the Company's lime and limestone products in the 2013 period, compared to the comparable 2012 period. 

Production volumes from the Company's natural gas interests for the third quarter 2013 totaled 239 thousand MCF, sold at an average price of $5.87 per MCF, compared to 303 thousand MCF, sold at an average price of $5.19 per MCF, in the comparable 2012 quarter.  Production volumes for the first nine months 2013 from natural gas interests totaled 751 thousand MCF, sold at an average price of $5.75 per MCF, compared to the first nine months 2012 when 957 thousand MCF was produced and sold at an average price of $5.69 per MCF.  The Company's average prices per MCF exceeds average natural gas prices because the Company's natural gas contains liquids.  The Company's average prices per MCF in the 2013 periods were higher than in the prior year's comparable periods due to the increases in natural gas prices, partially offset by lower prices for natural gas liquids.

The Company's gross profit was $9.1 million in the third quarter 2013, compared to $7.8 million in the comparable 2012 quarter, an increase of $1.4 million, or 17.4%. Gross profit in the first nine months 2013 was $24.4 million, a decrease of $950 thousand, or 3.8%, from $25.3 million in the first nine months 2012.

Included in gross profit for the third quarter and first nine months 2013 were $8.4 million and $22.4 million, respectively, from the Company's lime and limestone operations, compared to $7.0 million and $22.2 million, respectively, in the comparable 2012 periods.  The increased gross profit for the Company's lime and limestone operations in the third quarter 2013 resulted primarily from the increase in revenues discussed above.  The increase in gross profit for the first nine months 2013 resulted primarily from a decrease in outside contractor stripping costs to $1.5 million, compared $2.6 million in the comparable 2012 period, partially offset by the decrease in revenues discussed above.  The timing and amount of contract stripping costs in future periods will depend upon, among other things, the availability and cost-effective utilization of the contractors and their equipment.

Gross profit from the Company's natural gas interests decreased to $701 thousand and $1.9 million for the third quarter and first nine months 2013, respectively, from $787 thousand and $3.1 million, respectively, in the comparable 2012 periods, primarily due to the decreases in revenues in the 2013 periods, compared to the prior year periods.  No new wells were drilled in the first nine months 2013 or are currently being drilled.  The Company cannot predict the number of additional wells that ultimately will be drilled, if any, or their results.

The Company reported net income of $4.8 million ($0.86 per share diluted) in the third quarter 2013, compared to net income of $3.9 million ($0.71 per share diluted) in the third quarter 2012, an increase of $842 thousand, or 21.3%.  For the first nine months 2013, net income decreased by $460 thousand, or 3.6%, to $12.2 million ($2.19 per share diluted), compared to $12.6 million ($2.19 per share diluted) for the first nine months 2012.