UNITED STATES LIME & MINERALS, INC. FORWARD-LOOKING STATEMENTS.
Any statements contained in this Report that are not statements of historical fact are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this Report, including without limitation statements relating to the Company's plans, strategies, objectives, expectations, intentions, and adequacy of resources, are identified by such words as "will," "could," "should," "would," "believe," "possible," "potential," "expect," "intend," "plan," "schedule," "estimate," "anticipate" and "project." The Company undertakes no obligation to publicly update or revise any forward-looking statements. The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company's plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company's discretion; (ii) the Company's plans and results of operations will be affected by its ability to maintain and increase its revenues and manage its growth; (iii) the Company's ability to meet short-term and long-term liquidity demands, including meeting the Company's operating and capital needs, including possible acquisitions and paying dividends, and conditions in the credit and equity markets, including the ability of the Company's customers to meet their obligations; (iv) interruptions to operations and increased expenses at the Company's facilities resulting from changes in mining methods or conditions, variability of chemical or physical properties of the Company's limestone and its impact on process equipment and product quality, inclement weather conditions, including more severe and frequent weather events resulting from climate change, natural disasters, accidents, IT systems failures or disruptions, including due to cyber-security incidents or ransomware attacks, utility disruptions, supply chain delays and disruptions, labor shortages and disruptions, or regulatory requirements; (v) volatile coal, petroleum coke, diesel, natural gas, electricity, and transportation costs and the consistent availability of trucks, truck drivers and rail cars to deliver the Company's products to its customers and solid fuels to its plants on a timely basis at competitive prices; (vi) the Company's ability to expand its lime and limestone operations through projects and acquisitions of businesses with related or similar operations and the Company's ability to obtain any required financing for such projects and acquisitions, to integrate the projects and acquisitions into the Company's overall operations, and to sell any resulting increased production at acceptable prices; (vii) inadequate demand and/or prices for the Company's lime and limestone products due to increased competition from competitors, increasing competition for certain customer accounts, conditions in theU.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 onU.S. government obligations, trade wars, tariffs, international incidents, including the Russian conflict withUkraine , oil cartel production and supply actions, sanctions, economic and regulatory uncertainties under state governments and theUnited States Administration andCongress , 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 theSecurities and Exchange Commission (the "SEC"), including the Company's Quarterly Reports on Form 10-Q. 20 Table of Contents OVERVIEW. Set forth below is certain selected financial data for the five years endedDecember 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)
Operating profit for the years ended
(1) impacted by impairment charges of
value of the long-lived assets related to the Company's natural gas
interests.
(2) Dividends per share of common stock for 2019 included a special dividend of
$5.35 per share.
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.
We have identified one reportable business segment based on the distinctness of
our activities and products: Lime and Limestone Operations. All operations are
in the United States . Operating profit from our Lime and Limestone Operations
includes all of our selling, general and administrative costs. We do not
allocate interest expense and interest and other income to our Lime and
Limestone Operations.
On July 1, 2020 , we acquired Carthage , a limestone mining and production company
located in Carthage, Missouri , for $8.4 million cash. On February 9, 2022 , we
acquired Mill Creek , a dolomite mining and production company located in Mill
Creek, Oklahoma , for $5.6 million cash. We believe that these acquisitions will
complement our existing geographic footprint.
Our Other operations relate to our natural gas interests, consisting of royalty
and non-operated working interests under an oil and gas lease and a drillsite
agreement with two separate operators related to our Johnson County, Texas
property, located in the Barnett Shale Formation, on which Texas Lime conducts
its lime and limestone operations. In the fourth quarter 2020, we recognized an
impairment charge of $1.6 million ($1.2 million , net of tax) related to our
natural gas interests. The carrying values of the long-lived assets related to
our natural gas interests were $0.9 million as of December 31, 2022 . Based on
current production and pricing estimates, we believe that the carrying value of
these assets will be recoverable in future periods.
Our revenues increased 24.8% in 2022 compared to 2021. Revenues from our Lime
and Limestone Operations increased 24.6% in 2022, compared to 2021, primarily
due to increased demand from our construction, oil and gas services, and steel
customers. Revenues in 2022 were also favorably impacted by an increase in
average selling prices for our lime and limestone products of 10.6%.
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Our gross profit increased 18.7% in 2022 compared to 2021. Gross profit from our Lime and Limestone Operations in 2022 increased 17.6%, compared to 2021, primarily due to the increased revenues discussed above, partially offset by increased lime and limestone production costs, principally from higher transportation, energy, labor, and supplies costs. Our net income increased$8.4 million , or 22.6%, in 2022, compared to 2021. Net income per fully diluted share increased to$8.00 in 2022, compared to$6.54 in 2021.
Cash flows from operations enabled us to make
Absent a significant acquisition opportunity arising during 2023, we anticipate funding our operating and capital needs, and our quarterly cash dividend from our cash balances on hand and cash flows from operations.
Lime and Limestone Operations.
In our Lime and Limestone Operations, we produce and sell PLS, aggregate, quicklime, hydrated lime and lime slurry. The principal factors affecting our success are the level of demand and prices for our products and whether we are able to maintain sufficient production levels and product quality while controlling costs. Inclement weather conditions, such as winter ice and snow storms, cold weather, hurricanes, tornadoes and excessive rainfalls generally reduce the demand for lime and limestone products supplied to construction-related customers that account for a significant amount of our revenues. Inclement weather also interferes with our open-pit mining operations and can disrupt our plant production. In addition to weather, various maintenance, environmental, accident and other operational and construction issues can also disrupt our operations and increase our operating expenses. Demand for our lime and limestone products in our market areas is also affected by general economic conditions, the pace of construction, the demand for steel, the level of oil and gas drilling in our markets, the level of governmental and private funding for highway construction and infrastructure, and utility plant usage of coal for power generation. Demand for our lime and limestone products from our construction, oil and gas services, and steel customers increased in 2022. In 2022, we experienced rising costs, especially transportation, energy, labor, and supplies costs, and supply chain delays and disruptions as the global economy came out of restrictions related to the COVID-19 pandemic. We continue to monitor and assess the impact of the COVID-19 pandemic, including the emergence of new variants of the virus, implementation of new or enhanced pandemic-related restrictions, and the possibility of additional wide-spread or localized outbreaks of infections, any of which could have an adverse effect on our financial condition, results of operations, cash flows and competitive position. In 2014 and 2015,Texas approved two constitutional amendments authorizing a portion of oil and gas tax revenues to be deposited into theState Highway Fund , for certain other sales and use tax revenues to be directed to theState Highway Fund and, beginning inTexas' fiscal 2020, for certain state motor vehicle sales and rental tax revenues to be directed to theState Highway Fund . In its fiscal 2022,Texas transferred approximately$4.5 billion of such tax revenues to theState Highway Fund from these two amendments, with almost$23 billion transferred since 2015. In 2021, theUnited States Congress passed theInfrastructure Investment and Jobs Act, which is estimated to apportion approximately$26.9 billion toTexas for federal-aid highway programs, of which$5.2 billion was forTexas' fiscal 2022 and the remainder is estimated for fiscal 2023 through fiscal 2026. With these funding sources, we would expect to see strong continued demand from our construction customers, but the timing and amount of any increase in demand is uncertain and subject to weather, political, and other factors. Our modernization and expansion and development projects and acquisitions inTexas ,Arkansas ,Oklahoma andMissouri and ourTexas slurry operations have positioned us to meet the demand for high-quality lime and limestone products in our markets. Our modernization and expansion and development projects have
also
equipped us with
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up-to-date, fuel-efficient plant facilities, which have resulted in lower
production costs and greater operating efficiencies, thus enhancing our
competitive position. All of our rotary kilns are now fuel-efficient preheater
kilns. The addition of the vertical kiln at St. Clair in 2019 further increased
the fuel efficiency of our fleet of kilns.
For our plants to operate at peak efficiency, we must meet operational
challenges that arise from time to time, including bringing new facilities
on-line and refurbishing and/or improving acquired facilities, including the
facilities acquired as a result of our recent acquisitions of Carthage and Mill
Creek , as well as operating existing facilities efficiently. We also incur
ongoing costs for maintenance and to remain in compliance with rapidly changing
Environmental Laws and health and safety and other regulations.
Our primary variable cost is energy. Prices for coal, petroleum coke, diesel,
natural gas, electricity, transportation and freight are volatile, and our
energy costs increased substantially in 2022. In addition, our freight costs,
including the cost of diesel, to deliver our products can be high relative to
the value of our products.
Historically, we have been able to mitigate to some degree the impact of
volatile energy costs by varying the mixes of fuel used in our kilns, and by
passing on some of any increase in costs to our customers, where possible,
through higher prices and/or surcharges on certain products. In addition, as
noted above, we put a more fuel-efficient kiln in service at St. Clair , and we
continually look for other ways to better manage our energy costs at our plants.
Finally, we have not engaged in any significant hedging activity in an effort to
control our energy costs but may do so in the future.
We have financed our modernization and expansion and development projects and
acquisitions through a combination of debt financing, which has now been repaid,
and cash flows from operations. We must generate sufficient cash flows to cover
ongoing capital requirements, including current and possible future
modernization and expansion and development projects and acquisitions, or borrow
sufficient funds to finance any shortfall in our liquidity needs.
We continue to believe the enhanced efficiency and production capacity resulting
from our modernization and expansion and development projects in Texas ,
Arkansas , and Oklahoma , our expanded slurry operations, our acquisitions,
including the recent acquisitions of Carthage and Mill Creek , and the
operational strategies we have implemented have allowed us to increase our
efficiency, grow production capacity, improve product quality, better serve
existing customers, attract new customers and control costs. However, there can
be no assurance that demand and prices for our lime and limestone products will
enable us to fully utilize our additional production capacity, nor that our
production will not be adversely affected by weather, maintenance,
environmental, accident, cyber-security and other operational and construction
issues; that we can successfully invest in improvements to our existing
facilities and acquisitions; that our results will not be adversely affected by
increases in fuel, natural gas, electricity, transportation and freight costs,
taxes or new environmental, health and safety or other regulatory requirements;
or that, with increasing competition with other lime and limestone producers,
our revenues, gross profit, net income and cash flows can be maintained or
improved.
Other.
Revenues in 2022 included$2.7 million from our natural gas interests, compared to$1.9 million in 2021. Gross profit in 2022 included$1.4 million from our natural gas interests, compared to$0.6 million in 2021.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES.
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America ("US GAAP"). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities, at the date of our financial statements. Actual results may differ from these estimates and judgments under different assumptions or conditions and historical trends.
Critical accounting policies are defined as those that are reflective of significant management judgments and uncertainties and potentially result in materially different results under different assumptions and conditions. We believe
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the following critical accounting policies require the most significant management estimates and judgments used in the preparation of our consolidated financial statements.
Contingencies. We are party to proceedings, lawsuits and claims arising in the
normal course of business relating to regulatory, labor, product and other
matters. We are required to estimate the likelihood of any adverse judgments or
outcomes with respect to these matters, as well as potential ranges of possible
losses. A determination of the amount of reserves required, if any, for these
contingencies is made after careful analysis of each individual matter,
including coverage under our insurance policies. This determination may change
in the future because of new information or developments.
Income taxes. We utilize the asset and liability approach in reporting our
income taxes. Deferred income tax assets and liabilities are computed for
differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. We establish valuation
allowances when necessary to reduce deferred tax assets to the amount more
likely than not to be realized. Income tax related interest and penalties are
included in income tax expense. We also assess individual tax positions to
determine if they meet the criteria for some or all of the benefits of that
position to be recognized in our financial statements and only recognize tax
positions that meet the more-likely-than-not recognition threshold.
Environmental costs and liabilities. We record environmental accruals, including
accrued reclamation costs, in other liabilities, based on studies and estimates,
when it is probable we have incurred a reasonably estimable cost or liability.
The accruals are adjusted when further information warrants an adjustment.
Environmental expenditures that extend the life, increase the capacity or
improve the safety or efficiency of Company-owned assets or are incurred to
mitigate or prevent future possible environmental issues are capitalized. Other
environmental costs are expensed when incurred.
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RESULTS OF OPERATIONS.
The following table sets forth certain financial information expressed as a
percentage of revenues for the three years ended
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 revenuesLabor 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%. Revenues from our Lime and Limestone
Operations in 2022 increased $46.1 million , or 24.6%, to $233.4 million from
$187.4 million in 2021. The increase in revenues from our Lime and Limestone
Operations was primarily due to a 14.0% increase in sales volumes of our lime
and limestone products, principally to our construction, oil and gas services,
and steel customers. In addition, we realized a 10.6% average increase in prices
for our lime and limestone products in 2022, compared to 2021. Other revenues
included $2.7 million and $1.9 million in 2022 and 2021, respectively, from our
natural gas interests.
Our gross profit increased to $70.3 million for 2022 from $59.3 million for
2021, an increase of $11.1million , or 18.7%. Gross profit from our Lime and
Limestone Operations for 2022 was $69.0 million , compared to $58.7 million in
2021, an increase of $10.3 million , or 17.6%. The increase in gross profit in
2022, compared to 2021, resulted primarily from the increased revenues discussed
above, partially offset by increased lime and limestone production costs,
principally from higher transportation, energy, labor, and supplies costs. Gross
profit also included $1.4 million and $0.6 million in 2022 and 2021,
respectively, from our natural gas interests.
Selling, general and administrative expenses ("SG&A") increased to $15.6 million
for 2022, an increase of $2.7 million , or 21.1%, compared to $12.8 million for
2021. As a percentage of revenues, SG&A was 6.6% in 2022, compared to 6.8% in
2021. The increase in SG&A was primarily due to increased personnel expenses in
2022, compared to 2021.
Interest expense was
Interest and other income, net was
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Income tax expense was$11.1 million in 2022, for an effective rate of 19.7%, compared to$9.5 million in 2021, for an effective rate of 20.4%, an increase of$1.7 million , primarily due to the increase in income before taxes in 2022, compared to 2021. Our effective income tax rates for 2022 and 2021 were reduced from the statutory rate primarily due to statutory depletion in excess of cost depletion.
Net income increased to
2021 vs. 2020
Our revenues for 2021 increased to $189.3 million from $160.7 million in 2020,
an increase of $28.6 million , or 17.8%. Revenues from our Lime and Limestone
Operations in 2021 increased $27.7 million , or 17.3%, to $187.4 million from
$159.7 million in 2020. The increase in revenues from our Lime and Limestone
Operations was primarily due to a 16.4% increase in sales volumes of our lime
and limestone products principally to our construction, steel, environmental,
industrial, roofing, and agriculture customers. In 2020, the COVID-19 pandemic
and related restrictions on business activities resulted in a general economic
slowdown, which disproportionately impacted certain industries that purchase our
lime and limestone products. In addition, we realized a 0.9% average increase in
prices for our lime and limestone products in 2021, compared to 2020. Other
revenues included $1.9 million and $1.0 million in 2021 and 2020, respectively,
from our natural gas interests.
Our gross profit increased to $59.3 million for 2021 from $47.6 million for
2020, an increase of $11.7 million , or 24.5%. Gross profit from our Lime and
Limestone Operations for 2021 was $58.7 million , compared to $48.0 million in
2020, an increase of $10.7 million , or 22.2%. The increase in gross profit in
2021, compared to 2020, resulted primarily from the increased revenues discussed
above and increased operating efficiencies, partially offset by higher energy
costs. Gross profit also included a $0.6 million profit in 2021 and a $(0.4)
million loss in 2020 from our natural gas interests.
SG&A increased to $12.8 million for 2021, an increase of $0.7 million , or 5.5%,
compared to $12.2 million for 2020. As a percentage of revenues, SG&A was 6.8%
in 2021, compared to 7.6% in 2020. The increase in SG&A was primarily due to
increased personnel expenses in 2021, compared to 2020.
In the fourth quarter 2020, we recognized an impairment charge of $1.6 million
($1.2 million , net of tax) to adjust the carrying values of the long-lived
assets related to our natural gas interests. At December 31, 2021 , the
long-lived assets related to our natural gas interests had a carrying value of
$1.5 million .
Interest expense was
Interest and other income, net was
Income tax expense was$9.5 million in 2021, for an effective rate of 20.4%, compared to$5.8 million in 2020, for an effective rate of 17.2%, an increase of$3.6 million , primarily due to the increase in income before taxes in 2021, compared to 2020. Our effective income tax rates for 2021 and 2020 were reduced from the statutory rate primarily due to statutory depletion in excess of cost depletion.
Net income increased to
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Summary of Quarterly Financial Data
(dollars in thousands except per share amounts)
2022
March 31, June 30, September 30, December 31,
RevenuesLime and limestone operations$ 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,
RevenuesLime 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. Capital Requirements. We require capital primarily for normal recurring capital and re-equipping projects, modernization and expansion and development projects and acquisitions. Our capital needs are expected to be met principally from cash on hand, cash flows from operations and our$75.0 million revolving credit facility. We expect to spend approximately$20.0 million per year over the next several years in our Lime and Limestone Operations for normal recurring capital and re-equipping projects at our plants and facilities to maintain or improve efficiency, ensure compliance with Environmental Laws, meet customer needs and reduce costs. As ofDecember 31, 2022 , we had$1.5 million in open orders for equipment and construction contracts for our Lime and Limestone Operations. Liquidity and Capital Resources. Net cash provided by operating activities was$64.4 million in 2022, compared to$55.7 million in 2021, an increase of$8.7 million , or 15.6%. Our net cash provided by operating activities is composed of net income, depreciation, depletion and amortization ("DD&A"), other non-cash items included in net income and changes in working capital. In 2022, net cash provided by operating activities was principally composed of$45.4 million net income,$22.2 million DD&A,$2.5 million increase in deferred income taxes, and$2.6 million stock-based compensation, partially offset by an$8.1 million decrease from changes in working capital. In 2022, the changes in working capital were principally composed of a$6.4 million increase in trade receivables, net, primarily as a result of increased sales in the fourth quarter 2022, compared to the fourth quarter 2021, a$4.3 million increase in inventories, primarily due to increases in the cost and volume of our solid fuel stockpiles and our supply of critical parts, partially 27
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offset by a$2.8 million increase in accounts payable, accrued expenses and other liabilities. In 2021, net cash provided by operating activities was principally composed of$37.0 million net income,$20.9 million DD&A,$1.5 million increase in deferred income taxes,$2.2 million stock-based compensation, partially offset by a$6.0 million decrease from changes in working capital. In 2021, the changes in working capital were principally composed of a$3.7 million increase in trade receivables, net, primarily as a result of increased sales in the fourth quarter 2021, compared to the fourth quarter 2020, a$1.4 million decrease in accounts payable, accrued expense and other liabilities, and a$1.0 million increase in prepaid expenses and other assets. Net cash used in investing activities was$31.2 million for 2022, compared to$29.6 million for 2021. Net cash used in investing activities for 2022 included$5.6 million for the acquisition ofMill Creek and an additional$3.5 million capital investments in theMill Creek facility,$4.1 million for real property purchases, and$3.0 million for development of the Love Hollow Quarry and its connection to theBatesville plant. During 2022, we experienced increased costs associated with our normal recurring capital and re-equipping projects at our plants and facilities, as part of the current overall inflationary environment. We expect that the increase in these capital costs will result in increased DD&A expense in future periods. Net cash used in investing activities in 2021 included$14.0 million for the development of the Love Hollow Quarry and its connection to theBatesville plant and$2.3 million for other real property purchases. The balance of net cash used in investing activities in 2022 and 2021 was primarily for normal recurring capital and re-equipping projects at our plants and facilities. Net cash used in financing activities primarily consisted of$4.5 million for dividend payments and$0.8 million to repurchase shares of our common stock in 2022, compared to$3.6 million for dividend payments and$0.7 million to repurchase shares of our common stock in 2021.
Our cash and cash equivalents at
Banking Facilities and Debt. Our credit agreement withWells Fargo Bank, N.A. (the "Lender"), as amended as ofMay 2, 2019 andNovember 21, 2019 , provides for a$75 million revolving credit facility (the "Revolving Facility") and an incremental four-year accordion feature to borrow up to an additional$50 million on the same terms, subject to approval by the Lender or another lender selected by us. The credit agreement also provides for a$10 million letter of credit sublimit under the Revolving Facility. The Revolving Facility and any incremental loans mature onMay 2, 2024 . Interest rates on the Revolving Facility are, at our option, LIBOR plus a margin of 1.000% to 2.000%, or the Lender's Prime Rate plus a margin of 0.000% to 1.000%; and a commitment fee range of 0.200% to 0.350% on the undrawn portion of the Revolving Facility. The Revolving Facility interest rate margins and commitment fee are determined quarterly in accordance with a pricing grid based upon our Cash Flow Leverage Ratio, defined as the ratio of the Company's total funded senior indebtedness to earnings before interest, taxes, depreciation, depletion, amortization and stock-based compensation expense ("EBITDA") for the 12 months ended on the last day of the most recent calendar quarter, plus pro forma EBITDA from any businesses acquired during the period. Pursuant to a security agreement, datedAugust 25, 2004 , the Revolving Facility is secured by the Company's existing and hereafter acquired tangible assets, intangible assets and real property. The maturity of the Revolving Facility and any incremental loans can be accelerated if any event of default, as defined under the credit agreement, occurs. Our maximum Cash Flow Leverage Ratio is 3.50 to 1. We may pay dividends so long as we remain in compliance with the provisions of our credit agreement, and may purchase, redeem or otherwise acquire shares of our common stock so long as our pro forma Cash Flow Leverage Ratio is less than 3.00 to 1.00 and no default or event of default exists or would exist after giving effect to such stock repurchase. We had no debt outstanding as ofDecember 31, 2022 or 2021. We had$0.3 million of letters of credit issued under the Revolving Facility as ofDecember 31, 2022 , which count as draws against the available commitment under the Revolving Facility. 28 Table of Contents
Common Stock Buybacks. We spent$0.8 million ,$0.7 million and$0.6 million in 2022, 2021 and 2020, respectively, to repurchase treasury shares tendered for payment of the exercise price for stock options and the tax withholding liability upon the lapse of restrictions on restricted stock.
Contractual Obligations. The following table sets forth our contractual
obligations as of
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
Represents operating leases for railcars, corporate office space and some (1) equipment that are either non-cancelable or subject to significant penalty
upon cancellation.
(2) Of these obligations,
at
Purchase obligations includes enforceable agreements to purchase goods or
services that specify all significant terms, including fixed or minimum (3) quantities to be purchased, generally pertaining to fuel contracts,
fixed-price provisions, and the approximate timing of the transaction, and
are either non-cancelable or subject to significant penalty upon
cancellation.
Absent a significant acquisition, we believe that cash on hand and cash flows from operations will be sufficient to meet our operating needs, ongoing capital needs, including our current and possible future modernization and expansion and development projects, and liquidity needs and allow us to pay our regular cash dividends for the near future.
Off-Balance Sheet Arrangements. We do not utilize off-balance sheet financing arrangements.
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