United States Lime & Minerals Inc. reported third quarter 2016 results. Revenues in the third quarter 2016 were $38.7 million, compared to $37.0 million in the comparable 2015 quarter, an increase of $1.6 million, or 4.4 percent.
Revenues from the company’s lime and limestone operations in the third quarter 2016 increased $1.6 million, or 4.5 percent, to $38.1 million from $36.5 million in the comparable prior year quarter, while revenues from its natural gas interests were $0.6 million in each of the 2016 and 2015 third quarters.
“We are pleased that overall demand for our lime and limestone products increased in the third quarter 2016, although pricing remains a challenge in the current competitive environment,” said Timothy W. Byrne, president and chief executive officer.
For the nine months ended Sept. 30, 2016, revenues were $105.1 million, compared to $99.5 million in the comparable 2015 period, an increase of $5.6 million, or 5.6 percent. Revenues from the company’s lime and limestone operations in the first nine months 2016 increased $6.0 million, or 6.2 percent, to $103.6 million from $97.6 million in the comparable 2015 period, while revenues from its natural gas interests decreased $0.5 million, or 23.6 percent, to $1.5 million from $2.0 million in the comparable prior-year period.
The increases in lime and limestone revenues in the third quarter 2016, as compared to the third quarter 2015, resulted primarily from increased sales volumes of the company’s lime and limestone products due to increased demand, principally from its environmental and roof shingle customers, partially offset by reduced demand from its oil and gas services customers.
The increase in the company’s lime and limestone revenues in the first nine months 2016, compared to last year’s comparable period, resulted primarily from increased sales volumes due to increased demand, principally from its construction, environmental and roof shingle customers, partially offset by reduced demand from its oil and gas services customers.
Prices realized for the company’s lime and limestone products in the third quarter and first nine months 2016 were somewhat lower compared to the comparable 2015 periods.
Production volumes from the company’s natural gas interests in the third quarter 2016 totaled 156 thousand MCF, sold at an average price of $3.56 per MCF, compared to 177 thousand MCF, sold at an average price of $3.25 per MCF, in the comparable 2015 quarter.
Production volumes in the first nine months 2016 from natural gas interests totaled 473 thousand MCF, sold at an average price of $3.15 per MCF, compared to the first nine months 2015 when 548 thousand MCF was produced and sold at an average price of $3.56 per MCF. The Company’s 2016 average prices per MCF for the first nine months 2016 were lower than the prior year’s comparable period primarily due to decreases in natural gas and natural gas liquids prices.
Prices for natural gas and natural gas liquids were slightly higher in the third quarter 2016, compared to the third quarter 2015.
The company’s gross profit was $10.6 million in the third quarter 2016, compared to $10.4 million in the comparable 2015 quarter, an increase of $0.2 million, or 1.9 percent. Gross profit in the first nine months 2016 was $25.7 million, an increase of $2.4 million, or 10.4 percent, from $23.2 million in the first nine months 2015.
Included in gross profit in the third quarter and first nine months 2016 were $10.5 million and $25.7 million, respectively, from the company’s lime and limestone operations, compared to $10.3 million and $22.8 million, respectively, in the comparable 2015 periods.
Gross profit from the company’s natural gas interests was basically flat in the third quarter 2016, compared to the third quarter 2015. For the first nine months 2016, gross profit decreased to a loss of $19 thousand, from a profit of $0.4 million in the comparable 2015 period, primarily due to the decreased revenues discussed above and an increase in the rate at which non-cash depletion expense was recorded in the 2016 period.
Interest expense was $0.1 million in each of the 2016 and 2015 third quarters. For the first nine months 2016, interest expense decreased $0.8 million to $0.2 million from $1.0 million in the comparable 2015 period. The decrease in interest expense in the first nine months 2016 resulted from the company’s repayment of the $15.4 million then-outstanding balance of its term loans in May 2015 and the company’s repurchase of the related interest rate hedges in the second quarter 2015.