<PAGE>



                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

(Mark One)

          (X)   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the fiscal year ended December 31, 2002
                                       OR
          (  )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                          Commission File Number 0-4197

                       UNITED STATES LIME & MINERALS, INC.
                       -----------------------------------
             (Exact name of Registrant as specified in its charter)



              TEXAS                                     75-0789226
-----------------------------------     ---------------------------------------
 (State or other jurisdiction of        (I.R.S. Employer Identification Number)
  incorporation or organization)


  13800 MONTFORT DRIVE, SUITE 330, DALLAS, TEXAS                   75240
  ----------------------------------------------                   -----
     (Address of principal executive offices)                    (Zip code)



       Registrant's telephone number, including area code: (972) 991-8400

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                 Title of Each Class             Name of Each Exchange on
                                                    Which Registered

                                       None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                          Common Stock, $0.10 par value

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                    Yes  X       No
                                        ---        ---

         Indicate by a check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K. [X]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined by Rule 12b-2 of the Act).

                                    Yes          No X
                                        ---        ---

         The aggregate market value of Common Stock held by non-affiliates
computed as of the last business day of the Registrant's quarter ended June 30,
2002: $10,101,330.

         Number of shares of Common Stock outstanding as of March 24, 2003:
5,799,845.



<PAGE>



                       DOCUMENTS INCORPORATED BY REFERENCE

         Part III incorporates information by reference from the Registrant's
definitive Proxy Statement to be filed for its 2003 Annual Meeting of
Shareholders. Part IV incorporates certain exhibits by reference from the
Registrant's previous filings.

                                TABLE OF CONTENTS

<Table>
<Caption>

                                                                          PAGE
<S>                                                                        <C>
PART I......................................................................1

  ITEM 1.  BUSINESS.........................................................1
             General........................................................1
             Business and Products..........................................1
             Product Sales..................................................1
             Order Backlog..................................................1
             Seasonality....................................................2
             Limestone Reserves.............................................2
             Mining.........................................................2
             Plants and Facilities..........................................3
             Employees......................................................3
             Competition....................................................3
             Impact of Environmental Laws...................................4

  ITEM 2.  PROPERTIES.......................................................5

  ITEM 3.  LEGAL PROCEEDINGS................................................5

  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............5

PART II.....................................................................5

  ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS.......................................5

  ITEM 6.  SELECTED FINANCIAL DATA..........................................6

  ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................7
             FORWARD LOOKING STATEMENTS.....................................7
             CRITICAL ACCOUNTING POLICIES AND ESTIMATES.....................7
             RESULTS OF OPERATIONS..........................................8
             FINANCIAL CONDITION...........................................10
             ADDITIONAL FACTORS............................................13

  ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......14

  ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.....................15

  ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE.............................16

PART III...................................................................16

  ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.................16

  ITEM 11. EXECUTIVE COMPENSATION..........................................16
</Table>

                                       ii


<PAGE>

<Table>

<S>                                                                        <C>
  ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
           AND RELATED STOCKHOLDER MATTERS.................................16

  ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................16

  ITEM 14. CONTROLS AND PROCEDURES.........................................16

PART IV....................................................................16

  ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
             ON FORM 8-K...................................................17

  SIGNATURES ..............................................................20
</Table>

                                       iii

<PAGE>


                                     PART I


ITEM 1.  BUSINESS.

         GENERAL. The business of United States Lime & Minerals, Inc. (the
"Company" or the "Registrant"), which was incorporated in 1950, is the
production and sale of lime and limestone products. The Company extracts
high-quality limestone from its quarries and processes it for sale as pulverized
limestone, quicklime, and hydrated lime. These operations were conducted
throughout 2002 by three wholly-owned subsidiaries of the Company: Arkansas Lime
Company, Colorado Lime Company and Texas Lime Company.

         The Company's principal corporate office is located at 13800 Montfort
Drive, Suite 330, Dallas, Texas 75240. The Company's telephone number is (972)
991-8400 and its internet address is www.uslm.com. The Company's annual report
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act are available free of charge on or through
the Company's website as soon as reasonably practicable after the Company
electronically files such material with, or furnishes it to, the Securities and
Exchange Commission.

         BUSINESS AND PRODUCTS. The Company extracts high-quality limestone from
our quarries and then processes it for sale as pulverized limestone, quicklime
and hydrated lime. Pulverized limestone (also referred to as ground calcium
carbonate) is a dried product 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 to produce a
dry, white powder.

         Pulverized limestone is used primarily in the production of
construction materials such as roofing shingles and asphalt paving, as an
additive to agriculture feeds, as a soil enhancement and for mine safety dust in
coal mining operations. Quicklime is used primarily in the manufacturing of
paper products, in sanitation and water filtering systems, in metal processing
and in soil stabilization for highway and building construction. Hydrated lime
is used primarily in municipal sanitation and water treatment, in soil
stabilization for highway and building construction, in the production of
chemicals and in the production of construction materials such as stucco,
plaster and mortar.

         PRODUCT SALES. In 2002, the Company sold most of its products in the
states of Arkansas, Colorado, Kansas, Louisiana, Mississippi, New Mexico,
Oklahoma, Tennessee and Texas. Sales are made primarily by the Company's seven
sales employees who call on 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 potential customers.

         Principal customers for the Company's lime and limestone products are
highway, street and parking lot contractors, chemical producers, paper
manufacturers, roofing shingle manufacturers, steel producers, glass
manufacturers, municipal sanitation and water treatment facilities, poultry and
cattle feed producers, governmental agencies and electrical utility companies.

         Approximately 650 customers accounted for the Company's sales of lime
and limestone products during the year ended December 31, 2002. No single
customer accounted for more than 10% of such sales. The Company is not subject
to significant customer risks as its customers are considerably diversified as
to geographic location and industrial concentration. However, given the nature
of the lime and limestone industry, the Company's profits are very sensitive to
changes in sales volume.

         Lime and limestone products are transported by truck and rail to
customers generally within a radius of 400 miles of each of the Company's
processing plants. Substantially all of the Company's sales are made within the
United States.

         ORDER BACKLOG. The Company does not believe that backlog information
accurately reflects anticipated annual revenues or profitability from year to
year.



                                     - 1 -
<PAGE>


         SEASONALITY. The Company's sales have historically reflected seasonal
trends, with the largest percentage of total annual revenues being realized in
the second and third quarters. Lower seasonal demand normally results in reduced
shipments and revenues in the first and fourth quarters. Inclement weather
conditions generally have a negative impact on the demand for lime and limestone
products supplied to construction related customers, as well as on the Company's
open-pit mining operations.

         LIMESTONE RESERVES. The Company has two subsidiaries that extract
limestone from open-pit quarries: Texas Lime Company, which is located 14 miles
from Cleburne, Texas, and Arkansas Lime Company, which is located near
Batesville, Arkansas. A third subsidiary, Colorado Lime Company, owns limestone
resources at Monarch Pass located 15 miles west of Salida, Colorado. No mining
took place on the Colorado property in 2002. Existing crushed stone stockpiles
on the property were used to provide feedstock to the plant in Salida. Access to
all locations is provided by paved roads.

         Texas Lime Company operates upon a tract of land containing
approximately 470 acres, including the Cleburne Quarry. The Company owns
approximately 2,700 acres adjacent to the quarry. Both the quarry and the
adjacent land contain known high-quality limestone reserves in a bed averaging
28 feet in thickness, with an overburden that ranges from 0 to 50 feet. The
Company also has mineral interests in approximately 560 acres of land adjacent
to the northwest boundary of the Company's property. The calculated reserves, as
of December 31, 2002, were approximately 38,000,000 tons of proven reserves plus
approximately 91,000,000 tons of probable reserves. Assuming the current level
of production is maintained, the Company estimates that these reserves are
sufficient to sustain operations for approximately 100 years.

         Arkansas Lime Company operates the Batesville Quarry and has hydrated
lime and limestone production facilities on a second site linked to the quarry
by its own standard-gauge railroad. The active quarry operations cover
approximately 725 acres of land containing a known deposit of high-quality
limestone. The average thickness of the high-quality limestone deposit is
approximately 70 feet, with an average overburden thickness of 35 feet. The
Company also owns approximately 325 additional acres containing additional
high-quality limestone deposits adjacent to the present quarry but separated
from it by a public highway. The average thickness of this second high-quality
limestone deposit is approximately 55 feet, with an average overburden of 20
feet. The calculated reserves, as of December 31, 2002, were approximately
21,000,000 tons of proven reserves plus an additional 33,500,000 tons of
probable reserves. Assuming the present level of production available with Phase
I of the Arkansas modernization and expansion project completed, the Company
estimates that reserves are sufficient to sustain operations for approximately
75 years. However, this estimate is reduced to 50 years assuming that the
Arkansas facility reaches projected production levels after the planned Phase II
modernization and expansion.

         Colorado Lime Company acquired the Monarch Pass Quarry in November 1995
and has not carried out any mining on the property. A review of the potential
limestone resources has been completed by independent geologists; however, the
Company has not initiated a drilling program. Consequently, it is not possible
to identify and categorize reserves. The Monarch Pass Quarry, which had been
operated for many years until its closure in the early nineties, contains a
mixture of limestone types, including high-quality calcium limestone and
dolomite. The Company expects to continue to utilize remaining crushed stone
stockpiles to supply its processing plant in nearby Salida.

         MINING. The Company extracts limestone by the open-pit method at its
Arkansas and Texas quarries. Monarch Pass is also an open-pit quarry, but is not
being mined at this time. The open-pit method consists of removing any
overburden comprising soil, trees, and other substances, including inferior
limestone, and then extracting the exposed high-quality limestone. 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. The limestone is extracted by drilling and blasting utilizing standard
mining equipment. After extraction, limestone is crushed, screened, and ground
in the case of pulverized limestone, or further processed in kilns and hydrators
in the case of quicklime and hydrated lime, before shipment. The Company has no
knowledge of any recent changes in the physical quarrying conditions on any of
its properties which have materially affected its mining operations, and no such
changes are anticipated.



                                     - 2 -
<PAGE>



         PLANTS AND FACILITIES. The Company produces lime and/or limestone
products at three plants:

         The Cleburne, Texas plant has an annual capacity of approximately
470,000 tons of quicklime from three rotary kilns. The plant has pulverized
limestone equipment which has a capacity to produce approximately 1,000,000 tons
of pulverized limestone annually, depending on the product mix. In addition to
the Cleburne plant, the Company owns a dormant plant which is located near Blum,
Texas on a tract of land covering approximately 524 acres. The Blum plant was
acquired in 1989, and its kilns have not been operated since that time. The
Company has no plans to operate the kilns at this facility; however, the plant's
storage and shipment facilities are currently being utilized.

         The Arkansas lime production plant is situated at the Batesville
Quarry. The limestone and hydrate 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 standard gauge railroad. Utilizing one rotary kiln,
this plant has an annual capacity of approximately 210,000 tons of quicklime.
The plant has two grinding systems which, depending on the product mix, have the
capacity to produce 400,000 tons of pulverized limestone annually.

         In 1999, the Company commenced a modernization and expansion of the
Arkansas facility, to be completed in two phases, which is designed to expand
production and improve quality and service, enabling Arkansas Lime Company to
compete for new accounts and for the accounts of former customers lost due to
quality and service issues. Prior to the modernization and expansion, Arkansas
Lime Company had lost various accounts due to poor product quality and service
from the now retired vertical lime kilns which were installed in the 1920's.
Phase I, which was completed in the second quarter 2001, involved the
redevelopment of the quarry plant, rebuilding of the railroad to standard gauge,
purchase of a facility to establish an out-of-state terminal in Shreveport,
Louisiana, installation of a new rotary kiln with preheater, and additional
product storage and loading capacity. Completion of Phase I provides the Company
with modern quarry and lime manufacturing facilities.

         The Company has plans to refurbish the distribution terminal in
Shreveport, Louisiana, connected to the Kansas City Southern railroad, to
provide lime storage and distribution capacity to service markets in Louisiana
and East Texas. This terminal may be completed in conjunction with Phase II of
the Arkansas project. Phase II would further expand lime production capacity at
Arkansas to approximately 420,000 tons of quicklime by the installation of a
second preheater rotary kiln and additional storage capacity. The Company plans
to proceed with Phase II at the optimum time based on its future operating
results, market demand, and the ability to secure competitive construction bids
and financing.

         The Company maintains lime hydrating equipment and limestone drying and
pulverizing equipment at both the Texas and Arkansas plants. Storage facilities
for lime and pulverized 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 existing volume of shipments. Equipment is maintained at
each plant to load trucks, and at the Arkansas and Blum plants to load railroad
cars.

         Colorado Lime Company operates a limestone drying, grinding, and
bagging facility, with an annual capacity of approximately 50,000 tons, on 8
acres of land in Salida, Colorado. The property is leased from the Union Pacific
Railroad for a term of 5 years, commencing June 1999, with renewal options for a
further 10 years. This plant's facilities also include a small rotary lime kiln
which is permitted for operation but is presently dormant. A mobile stone
crushing and screening plant is situated at the Monarch Pass Quarry, to produce
agricultural grade limestone, with an annual capacity of up to 40,000 tons.

         The Company believes that its processing plants are adequately
maintained and insured. Both the Texas and Arkansas plants have recently been
modernized and expanded. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Financial Condition."

         EMPLOYEES. The Company employed, at December 31, 2002, 198 persons, 23
of whom are engaged in administrative and management activities and 7 of whom
are engaged in sales activities. Of the Company's 168 production employees, 111
are covered by two collective bargaining agreements. The agreement for the
Arkansas facility expires in January 2005, and the agreement for the Texas
facility expires in November 2005.

         COMPETITION. The lime industry is highly localized and competitive,
with quality, price, ability to meet customer demand, and proximity to customers
being the prime competitive factors. The Company's competitors are predominantly
private companies.

         In recent years, the demand for lime has been relatively strong. The
Transportation Equity Act for the 21st Century (signed into law in 1998 and
expiring September 2003) has provided federal funding for highway construction.
A new five year bill is included in President Bush's budget as recently
presented to Congress. Due


                                     - 3 -
<PAGE>
to wide bi-partisan support, it is expected to pass; therefore, the Company
believes that there will be a continuing strong level of demand by the highway
construction sector for lime products used in highway construction for the next
few years.

         The lime industry is characterized by high barriers to entry,
including: the scarcity of high-quality limestone deposits on which the required
zoning and permits for extraction can be obtained; the need for lime plants to
be located close to markets and railroad networks to enable cost-effective
production and distribution; recent clean air and anti-pollution legislation
which has made it more difficult to obtain permitting for new sources of
emissions, such as lime kilns; and the high capital cost of the facilities.
These considerations reinforce the premium value of operations having permitted,
long-term, high-quality mineral reserves and good locations relative to markets.
Producers tend to be concentrated on known limestone formations where
competition takes place on a local basis. The industry as a whole has expanded
its customer base and, while the steel industry is still the largest market
sector, it also counts pulp and paper producers and road builders among its
major customers. In recent years, the environmental-related uses for lime have
expanded, including use in flue gas desulfurization and the treatment of both
waste and potable water.

         There is a continuing trend of consolidation in the lime and limestone
industry, with the three largest lime companies now accounting for more than
two-thirds of North American lime capacity. In addition to the consolidations,
and often in conjunction with them, many lime producers have undergone
modernization and expansion projects to upgrade their processing equipment in an
effort to improve operating efficiency. The Company's Texas and Arkansas
modernization and expansion projects should allow it to continue to remain
competitive, protect its markets, and position itself for the future. In
addition, the Company will continue to evaluate external opportunities for
expansion. However, the Company may have to revise its strategy, or otherwise
find ways to enhance the value of the Company, including entering into strategic
partnerships, mergers, or other transactions.

         IMPACT OF ENVIRONMENTAL LAWS AND LIABILITIES. The Company owns or
controls large areas of land upon which it operates limestone quarries and their
associated processing plants with inherent environmental responsibilities and
environmental compliance costs, including capital, maintenance and operating
costs with respect to pollution control facilities, the cost of ongoing
monitoring programs and other similar costs.

         The Company's operations are subject to various federal, state, and
local laws and regulations relating to the environment, health and safety, and
other regulatory matters ("Environmental Laws"). These Environmental Laws grant
the United States Environmental Protection Agency ("EPA") and state governmental
agencies the authority to promulgate regulations that could result in
substantial expenditures on pollution control and waste management. The rate of
change of Environmental Laws has been rapid over the last decade, and compliance
can require significant expenditures. For example, federal legislation required
Texas Lime Company and Arkansas Lime Company to apply for "Title V" operating
permits that have significant ongoing compliance monitoring costs. In addition
to the Title V permits, other environmental operating permits are required for
the Company's operations, and such permits are subject to modification, renewal
and revocation. Also, raw materials and fuels used to manufacture lime and
calcium contain chemicals and compounds, such as trace metals, that may be
classified as hazardous substances. The EPA is now drafting regulations to
control emissions of hazardous air pollutants from lime plants. Due to the
uncertainty of the scope of these regulations, the Company cannot be certain
that it will always be able to comply with changing Environmental Laws without a
material adverse effect on its financial condition, results of operations, cash
flows or competitive position. The risk of environmental liability is inherent
in the operation of the Company's business, as it is with other companies
engaged in similar businesses, and there can be no assurance that environmental
liabilities will not have a material adverse effect on the Company's financial
condition, results of operations, cash flows or competitive position in the
future. See also "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - FINANCIAL CONDITION - Environmental Matters."

         The Company intends to comply with all Environmental Laws, but because
many of the requirements are subjective and therefore not quantifiable or
presently determinable, or may be affected by future legislation and rulemaking,
it is not possible to accurately predict the aggregate future costs of
compliance and their effect on the Company's financial condition, results of
operations, cash flows or competitive position. In the judgment of management,
expenditure requirements for future environmental compliance will continue to
increase as reporting standards are increased; however, such expenditures are
not expected to be of such dimension as to have a materially adverse effect on
the Company's financial condition, results of operation, cash flows, or
competitive position.

         The Company's recurring costs associated with managing and disposing of
potentially hazardous substances (such as fuels and lubricants used in
operations) and maintaining pollution control equipment amounted


                                     - 4 -
<PAGE>


to approximately $350,000 in 2002 and $250,000 in 2001. The Company has not been
named as a potentially responsible party in any federal superfund cleanup site
or state-lead cleanup site.


ITEM 2.  PROPERTIES.

         Reference is made to Item 1 of this Report for a description of the
properties of the Company, and such description is hereby incorporated by
reference in answer to this Item 2. As discussed in Note 3 of Notes to
Consolidated Financial Statements, the Company's plant facilities and mineral
reserves are subject to encumbrances to secure the Company's loans.


ITEM 3.  LEGAL PROCEEDINGS.

         Information regarding legal proceedings is set forth in Note 9 of Notes
to Consolidated Financial Statements and is hereby incorporated by reference in
answer to this Item 3.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         The Company did not submit any matters to a vote of security holders
during the fourth quarter 2002.


                                     PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The Company's Common Stock is quoted on the Nasdaq National Market(R)
under the symbol "USLM." As of March 24, 2003, the Company had approximately 500
stockholders of record.

         As of March 24, 2003, the Company had 500,000 shares of $5.00 par value
preferred stock authorized; however, none has been issued.

         The high and low sales prices for the Company's Common Stock, as well
as dividends declared, for the periods indicated were:

<Table>
<Caption>

                                      2002                                   2001
                       -----------------------------------    -----------------------------------
                            MARKET PRICE                          MARKET PRICE
                       ---------------------     DIVIDENDS    ---------------------     DIVIDENDS
                         LOW          HIGH       DECLARED       LOW          HIGH       DECLARED
                       --------     --------     --------     --------     --------     ---------
<S>                    <C>          <C>          <C>          <C>          <C>          <C>
First Quarter          $   4.50     $   5.60     $  0.025     $   4.81     $   5.38     $  0.025
Second Quarter         $   4.20     $   6.00     $  0.025     $   4.50     $   5.00     $  0.025
Third Quarter          $   3.49     $   4.74     $  0.025     $   4.91     $   6.54     $  0.025
Fourth Quarter         $   3.21     $   4.24     $  0.025     $   4.40     $   6.55     $  0.025
</Table>



                                     - 5 -
<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA.

<Table>
<Caption>

                                                       (dollars in thousands, except per share amounts)

                                                                   YEARS ENDED DECEMBER 31,
                                             ------------------------------------------------------------------
                                               2002           2001          2000           1999          1998
                                             ---------     ---------     ---------      ---------     ---------
<S>                                          <C>           <C>           <C>            <C>           <C>
Operating results
     Revenues                                $  39,162        39,753        32,456         31,537        28,769
     Gross profit                                9,508        10,465         6,505          9,097         7,061
     Operating profit                            5,539         6,390         2,569          5,615         3,698
     Income (loss) before taxes                    671         2,189          (820)         3,377         3,854
     Net income (loss)                       $     636         1,773          (635)         2,533         2,929

Income (loss) per share of common stock:

     Basic and diluted income (loss) per
       common share                          $    0.11          0.32         (0.16)          0.64          0.74
                                             =========     =========     =========      =========     =========
</Table>

<Table>

                                                                      AS OF DECEMBER 31,
                                             ------------------------------------------------------------------
                                               2002           2001          2000           1999          1998
                                             ---------     ---------     ---------      ---------     ---------
<S>                                          <C>              <C>           <C>            <C>           <C>
Total assets                                 $  84,519        89,409        93,614         77,688        51,090
Long-term debt,
     excluding current installments          $  37,500        40,833        44,167         42,500        16,196
Stockholders' equity per
     outstanding common share                $    6.60          6.64          6.97           7.23          6.70
Cash dividends per common share              $    0.10          0.10          0.10           0.10          0.10
Employees at year end                              198           200           212            205           200
</Table>


See "Management's Discussion and Analysis of Financial Condition and Results of
Operations," and Notes to Consolidated Financial Statements.


                                     - 6 -
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.


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," "believe," "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 in the Company's discretion; (ii) the Company's
plans and results of operations will be affected by its ability to manage its
growth and modernization; (iii) the Company's ability to meet short-term and
long-term liquidity demands; (iv) inclement weather conditions; (v) increased
fuel costs; (vi) unanticipated delays or additional cost overruns in completing
current or planned construction projects; (vii) reduced demand for the Company's
products; and (viii) other risks and uncertainties set forth below or indicated
from time to time in the Company's filings with the Securities and Exchange
Commission.

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 in the
United States. 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 liabilities, at
the date of our financial statements. Actual results may differ from these
estimates under different assumptions or conditions.

         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. The
Company believes the following critical accounting policies require the most
significant management judgments and estimates used in the preparation of its
consolidated financial statements.

         ALLOWANCE FOR DOUBTFUL ACCOUNTS. The Company evaluates the adequacy of
its allowance for doubtful accounts at the end of each quarter. In performing
this evaluation, the Company analyzes the payment history of its significant
past due accounts, subsequent cash collections on these accounts and the extent
to which they are secured by bonds. Based on this information, the Company
develops what it considers to be a reasonable estimate of the uncollectible
amounts included in trade receivables. Actual uncollectible amounts may differ
from the Company's estimate.

         LONG-LIVED ASSETS. The Company reviews its long-term assets for
impairment in accordance with the guidelines of Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144"). SFAS 144 requires that, when events or
circumstances indicate that the carrying amount of an asset may not be
recoverable, the Company should determine if impairment of value exists. If the
estimated undiscounted future net cash flows are less than the carrying amount
of the assets, an impairment exists and an impairment loss must be calculated
and recorded. If an impairment exists, the impairment loss is calculated based
on the excess of the carrying amount of the asset over the asset's fair value.
Any impairment loss is treated as a permanent reduction in the carrying value of
the assets.

         DEFERRED TAX ASSETS. The Company records a valuation allowance to
reduce its deferred tax assets to the amount that is more likely than not to be
realized. The Company considers future taxable income and ongoing prudent and
feasible tax planning strategies in assessing the need for the valuation
allowance. In the event that it was determined that the Company would be able to
realize deferred tax assets in the future in excess of the net recorded amount,
an adjustment to deferred tax assets would increase income in the period such
determination was made. Conversely, should the Company determine that it would
not be able to realize all or part of the net deferred tax assets in the future,
an adjustment to deferred tax assets would be charged to income in the period
such determination was made.

         CONTINGENCIES. The Company is party to proceedings, lawsuits and claims
arising in the normal course of business relating to environmental, labor,
product and other matters. The Company is required to estimate the


                                     - 7 -
<PAGE>


likelihood of any adverse judgments or outcomes to these matters as well as
potential ranges of probable losses. A determination of the amount of reserves
required, if any, for these contingencies are made after careful analysis of
each individual issue including coverage under the Company's insurance policies.
This determination may change in the future because of new developments.

         PENSION PLAN. The Company has one noncontributory defined benefit
pension plan. All benefit accruals under the plan ceased as of July 31, 1997.
The Company's costs, credits and funded status for this plan are developed from
actuarial valuations. Inherent in these valuations are key assumptions including
discount rates and expected long-term return on plan assets. Future costs,
credits and funded status for this plan may change should conditions warrant
changes in the assumptions.

RESULTS OF OPERATIONS.

         The following table sets forth selected financial information of the
Company expressed as a percentage of revenues for the periods indicated:

<Table>
<Caption>


                                                    YEAR ENDED DECEMBER 31,
                                                   --------------------------
                                                   2002       2001       2000
                                                   ----       ----       ----
<S>                                                <C>        <C>        <C>
Revenues                                            100%       100%       100%

Cost of revenues
     Labor and other operating expenses             (60)       (59)       (65)

     Depreciation, depletion and amortization       (16)       (15)       (15)
                                                   ----       ----       ----
         GROSS PROFIT                                24         26         20

Selling, general and administrative expenses        (10)       (10)       (12)
                                                   ----       ----       ----
         OPERATING PROFIT                            14         16          8

Other expenses:
     Interest expense                               (11)        (9)       (10)

     Other, net                                      (1)        (1)        (1)

Federal and state income tax (expense) benefit       --         (1)         1
                                                   ----       ----       ----

         NET INCOME (LOSS)                            2%         5%        (2%)
                                                   ====       ====       ====
</Table>

         EMBEZZLEMENTS. On January 31, 2002, the Company announced that it had
discovered that an employee who recently left the Company may have improperly
diverted Company funds without authorization. Trading in the Company's common
stock on the Nasdaq National Market(R) ("Nasdaq") was halted, and the Audit
Committee of the Company's Board of Directors retained outside counsel to
conduct a special investigation into the matter. The Audit Committee also
retained an independent accounting firm to review the Company's internal
controls and to make recommendations for improvement which the Company has
implemented. The Company also contacted the Securities and Exchange Commission
(the "SEC"), as well as criminal authorities, and cooperated with the SEC,
Nasdaq, and criminal authorities with respect to their investigations into this
matter.

         The Company's former Vice President - Finance, Controller, Treasurer,
and Secretary, Larry Ohms (the "Former VP Finance"), over a period of four years
beginning in 1998, embezzled $2,179,000 from the Company. The Former VP Finance
voluntarily resigned from the Company on January 22, 2002, approximately one
week before the Company discovered the defalcations. The Company has since filed
suit against the Former VP Finance. The Former VP Finance has stated that no one
else at the Company was involved in perpetrating the embezzlements. Based on the
results of the special investigation, the Company believes this statement to be
accurate.

         On March 14, 2002, the Company received $500,000 in insurance proceeds
from the Company's insurance policies covering employee theft. The $500,000 had
been recorded on the Consolidated Balance Sheet at December 31, 2001 in prepaid
expenses and other assets, and recognized in the Consolidated Statement of
Operations in other income in the fourth quarter 2001. In addition, the Company
retained counsel for assistance in its efforts to recover the embezzled funds
from the Former VP Finance, and to pursue possible civil actions on behalf of
the Company against third parties. The Former VP Finance has claimed not to have
any funds. Any future recoveries will be recognized in the quarters in which
they are realized, and the costs associated with of the


                                     - 8 -
<PAGE>


Company's special investigation, the Company's cooperation with the SEC, Nasdaq,
and criminal authorities in their investigations, and the Company's ongoing
recovery efforts are being expensed as incurred. During 2002, no additional
recoveries were realized. During 2002, the Company recorded $648,000 ($0.11 per
basic and diluted share) net of income tax benefits ($683,000 gross) for
embezzlement-related costs.

         Of the total amount embezzled, $126,000 was embezzled during 1998,
$282,000 was embezzled during 1999, $791,000 was embezzled during 2000, and
$980,000 was embezzled during 2001. The Former VP Finance used a variety of
methods to hide the embezzlements. Funds embezzled during 1998 were improperly
expensed to selling, general and administrative expenses. Funds embezzled during
1999 were improperly expensed to labor and other operating expenses. Of the
$791,000 that was embezzled in 2000, $328,000 was improperly expensed to labor
and other operating expenses, and $463,000 was improperly recorded as prepaid
financing costs within other assets, net. Funds embezzled during 2001 totaling
$980,000 were also improperly recorded as prepaid financing costs in other
assets, net. As a result of the fraudulent entries in other assets, net during
2000 ($463,000) and 2001 ($980,000), the Company improperly recognized excess
amortization of its prepaid financing costs, as a component of interest expense,
of $19,000 for the year ended December 31, 2000 and $166,000 for the nine months
ended September 30, 2001.

         As a result of the embezzlements, the Company reclassified to other
expenses $126,000 in 1998 and $282,000 in 1999, and removed those amounts from
selling, general and administrative expenses, and labor and other operating
expenses, respectively. The embezzlements had a material effect on the Company's
consolidated financial statements for fiscal year 2000. Therefore, the Company
restated its financial statements for 2000. In addition to the correction for
the overstated prepaid financing costs in 2000 and the reclassification of
excess interest expense to other expenses, the Company's restatement resulted in
an additional loss of $344,000 ($0.09 per basic and diluted share) net of income
tax benefits ($444,000 gross) in 2000.

                                  2002 VS. 2001

         Revenues decreased to $39,162,000 in 2002 from $39,753,000 in 2001, a
decrease of $591,000, or 1.5%. This primarily resulted from a 2.6% decrease in
sales volume, partially offset by a 1.1% increase in sales prices. The decrease
in revenues primarily resulted from a reduction in Texas highway construction
work in 2002 compared to 2001 and operational problems at the Texas plant in
June, July and August 2002, partially offset by increased lime sales at the
Arkansas plant.

         The Company's gross profit was $9,508,000 for 2002, compared to
$10,465,000 for 2001, a 9.1% decrease. Gross profit margin as a percentage of
revenues for 2002 decreased to 24.3% from 26.3% in 2001. The decrease in gross
profit and gross profit margin during 2002 was primarily due to a $253,000
increase in depreciation expense and reduced production at the Texas plant in
June, July and August due to operational problems, partially the result of
unseasonably wet weather. These were partially offset by increased production
and sales at the Arkansas plant. The increase in depreciation primarily resulted
from a full year's depreciation in 2002 on the Company's Arkansas Phase I
modernization and expansion compared to eight months of depreciation in 2001
after Phase I was completed. The reduced production at the Texas plant resulted
in the depletion of finished goods inventories and increased costs through the
purchase of lime from alternative sources to fulfill some of the Company's sales
commitments. The Company's gross profit margin was also negatively impacted in
the fourth quarter of 2002 by increased natural gas prices that have continued
into 2003.

         Selling, general and administrative expenses ("SG&A") decreased by
$106,000, or 2.6%, to $3,969,000 in 2002, as compared to $4,075,000 in 2001.
This decrease primarily resulted from a reduction in bonus expense during 2002.
As a percentage of sales, SG&A was 10.1% in 2002, as compared to 10.3% in 2001.

         Interest expense in 2002 was $4,329,000. This compares to $3,821,000,
net for 2001, after $845,000 had been capitalized as part of the Arkansas Phase
I project costs during 2001. Gross interest expense decreased $337,000 due to
$4,458,000 of net repayments of outstanding debt during 2002 and lower interest
rates on the Company's revolving credit facility.


         Other expense, net was $539,000 in 2002, as compared to $380,000
expense in 2001. Other expense, net in 2002 primarily consisted of $683,000 of
embezzlement-related costs, partially offset by interest and other income. Other
expense, net in 2001 primarily consisted of $980,000 of embezzlement expense,
partially offset by $500,000 of insurance proceeds from the Company's insurance
policies covering employee theft, interest and other income. (See Note 2 of
Notes to Consolidated Financial Statements.)


         The Company's net income for 2002 was $636,000 ($0.11 per share)
compared to net income of $1,773,000 ($0.32 per share) in 2001.


                                     - 9 -
<PAGE>



                                  2001 VS. 2000

         Revenues increased to $39,753,000 in 2001 from $32,456,000 in 2000, an
increase of $7,297,000, or 22.5%. This increase was a result of a 21.2% increase
in sales volume and a 1.3% increase in sales price. The increased sales were
attributable to increased lime sales at the Arkansas plant and, to a lesser
extent, increased pulverized limestone sales at the Texas plant.

         The Company's gross profit was $10,465,000 for 2001 compared to
$6,505,000 for 2000, a $3,960,000, or 60.8%, increase. As a percentage of
revenues, gross profit margin increased to 26.3% in 2001 from 20.0% in 2000.
Gross profit and gross profit margins improved during the year due to the
increased sales volumes and increase production efficiencies at both the Texas
and Arkansas facilities. These increases helped to overcome the negative impact
of higher depreciation expense resulting from the Company's modernization and
expansion efforts. Although, the cost of natural gas decreased during the second
half of 2001, the Company was negatively impacted by a total fuel (coal, coke
and natural gas) price variances of approximately $700,000 versus fuel costs in
2000.

         SGA expenses increased by $139,000, or 3.5%, to $4,075,000 in 2001 from
$3,936,000 in 2000, mainly as a result of increased bonus expense. As a
percentage of revenues, SGA expenses decreased to 10.3% in 2001 from 12.1% in
2000. The decrease in SGA as a percentage of revenues was primarily the result
of sales increases of 22.5% without any increase in the Company's sales force.

         Interest expense increased 21.1% to $3,821,000 in 2001 from $3,155,000
in 2000. The increase was primarily the result of the Company's decreased level
of capitalized interest related to the modernization and expansion project at
Arkansas as a result of it's completed in April 2001. Interest capitalized was
$845,000 in 2001 compared to $1,600,000 in 2000.

         The Company's net income for 2001 was $1,773,000 ($0.32 per share)
compared to a net loss of $635,000 ($0.16 per share) in 2000. In addition to the
several factors listed above, in 2001 the Company was adversely affected by a
decrease in interest income of $512,000 as a result of lower cash balances,
offset by a decrease of $311,000 in embezzlement expenses, net of insurance
proceeds (or $224,000, net of taxes) versus 2000.

FINANCIAL CONDITION.

         LIQUIDITY AND CAPITAL RESOURCES. Net cash provided by operating
activities was $8,207,000 for 2002, compared to $200,000 for 2001. The
$8,007,000 improvement was primarily the result of changes in working capital.
The most significant changes in working capital resulted from $5,043,000 less
cash being required to pay for accounts payable and accrued expenses during 2002
compared to 2001. The $5,312,000 cash required to pay for accounts payable and
accrued expenses in 2001 primarily was for payments of costs incurred in 2000
related to the Phase I modernization and expansion project at the Arkansas
facility. In addition, the Company reduced its inventories by $275,000 in 2002,
compared to a $825,000 increase in 2001, and accounts receivable decreased
$497,000 during 2002, compared to a $1,598,000 increase in 2001. The $534,000
cash flow resulting from the decrease in prepaid expenses in 2002 was primarily
due to the $500,000 in insurance proceeds received in March 2002.

         The Company believes that the enhanced production capacity resulting
from its modernization and expansion efforts at the Texas and Arkansas plants
and the operational strategies implemented by management in the early part of
2001 have allowed the Company to increase production, improve product quality,
and better serve existing customers and attract new customers. In spite of
certain operational problems at the Texas plant (see RESULTS OF OPERATIONS -
2002 vs. 2001), the Company reduced its outstanding debt by $4,458,000 during
2002.

         CAPITAL EXPENDITURES. The Company completed the modernization and
expansion project at the Texas facility at the end of 1998 and Phase I of the
Arkansas facility project in the second quarter 2001. The Company expects to
spend approximately $3,000,000 to $4,000,000 per year over the next several
years for normal recurring capital and re-equipping projects at the plant
facilities to maintain or improve efficiency and reduce costs.

         During the fourth quarter 2000, the Company commissioned a new line for
the production of pulverized limestone at Texas Lime Company. This investment
has allowed the Company to pursue new business opportunities and to better serve
existing customers. The lack of reliability of a single production line had been
a


                                     - 10 -
<PAGE>


restraining factor on sales to several large customers requiring
"around-the-clock" availability. The new line resulted in new customers during
2001 and 2002.

         The Arkansas modernization and expansion project was started in
November 1999 and is expected to be completed in two phases: Phase I, which was
completed in the second quarter 2001, involved the redevelopment of the quarry
plant, rebuilding of the railroad to standard gauge, the purchase of a facility
to establish an out-of-state terminal in Shreveport, Louisiana, the installation
of a rotary kiln with preheater and increased product storage and loading
capacity. The kiln in Phase I produced its first lime on October 22, 2000, which
continues to be of excellent quality and well received by customers. After
additional work in order to be fully operational and efficient, Phase I of the
modernization and expansion project for the Arkansas plant was completed in the
second quarter 2001.

         The total cost of Phase I was approximately $33,000,000. The
$33,000,000 includes $1,800,000 of costs associated with the pre-building of
certain facilities for Phase II of the Arkansas project and the purchase of, but
not all of the improvements to, the out-of-state terminal in Shreveport,
Louisiana.

         Phase II of the Arkansas project will further expand the plant's
capacity through the installation of a second kiln with additional storage
capacity, and includes the completion of the out-of-state terminal in
Shreveport, Louisiana for distribution of the Company's products. The estimated
additional costs to complete Phase II is approximately $16,000,000. The Company
plans to proceed with Phase II at the optimum time based on its future operating
results, market demand, financing and the ability to secure competitive
construction bids. As part of this financing, the Company may decide to incur
additional debt or issue additional equity securities or both.

         The Company invested $3,622,000 in capital expenditures in 2002,
compared to $4,113,000 in 2001. In 2001, capital expenditures of approximately
$715,000 related to the completion of Phase I of the Arkansas facility.

         During the fourth quarter 2000, the Company required additional capital
because the costs to complete both Phase I of the Arkansas modernization and
expansion project and the new pulverized limestone production line at Texas were
significantly higher than originally anticipated and because the Company's cash
flows and operating profits were lower than expected. To meet its short-term
liquidity demands, the Company made a pro-rata rights offering to its existing
shareholders to raise $10,000,000 in additional equity capital. The rights
offering closed on February 8, 2001, raising net proceeds of $9,551,000.

         BANKING FACILITIES AND OTHER DEBT. On April 22, 1999, the Company
entered into a credit agreement with a consortium of commercial banks for a
$50,000,000 Senior Secured Term Loan (the "Loan"). The Loan is repayable over a
period of approximately 8 years, maturing on March 30, 2007, and requires
monthly principal payments of approximately $278,000, which began April 30,
2000, with a final principal payment of $26,944,000 on March 30, 2007, which
equates to a 15-year amortization. The Company paid a fee equivalent to 2-1/2%
of the Loan value to the placement agent.

         Upon execution of the Loan agreement, the first $30,000,000 was
advanced, of which approximately $20,000,000 was used to retire all existing
bank loans, with the balance used primarily for Phase I of the Arkansas
modernization and expansion project. Under the terms of the Loan agreement, the
remaining $20,000,000 of the Loan facility was drawn down in four equal
quarterly installments beginning June 30, 1999, and ending March 30, 2000.

         The interest rate on the first $30,000,000 of the Loan is 8.875%. The
subsequent installments bear interest from the date they were funded at 3.52%
above the secondary market yield of the United States Treasury obligation
maturing May 15, 2005. The blended rate for the additional $20,000,000 is 9.84%.

         The Loan is secured by a first lien on substantially all of the
Company's assets, with the exception of accounts receivable and inventories
which secure the Company's $5,000,000 revolving credit facility. The Loan
agreement contains covenants that restrict the incurrence of debt, guaranties,
and liens, and places certain restrictions on the payment of dividends and the
sale of significant assets. The Company is also required to meet minimum debt
service coverage ratios on an on-going basis and maintain a minimum level of
tangible net worth.

         On April 26, 2001, the Company renewed its revolving credit facility,
with a new maturity date of May 31, 2002. The revolving credit facility was
increased from $4,000,000 to $5,000,000 and bears interest at LIBOR plus a
margin of 1.40% to 3.55% in accordance with a defined rate spread based upon the
Company's then-current ratio of total funded debt to earnings before interest,
taxes, depreciation and amortization (EBITDA). On December 31, 2001, the Company
amended the revolving credit facility to extend the maturity date to July 31,
2002 and to allow for a contractual overadvance above the borrowing base
limitation as previously stated in the facility in an amount not to exceed
$750,000 that expired on July 31, 2002. The $5,000,000 revolving credit facility
was further amended on May 31, 2002 to extend the maturity date to January 31,
2003, and on January 31,


                                     - 11 -
<PAGE>


2003, to extend the maturity date to July 31, 2003. At December 31, 2002, the
outstanding balance on the revolving credit facility was $1,200,000 and the
average interest rate for 2002 was 4.15%.

         On March 3, 2003, the Company entered into a Loan and Security
Agreement with a bank for a new $5,000,000 revolving credit facility to replace
the existing facility and a $2,000,000 equipment line of credit. The new
revolving credit facility is secured by the Company's receivables and
inventories, provides for an interest rate of LIBOR plus 2.75%, and matures on
March 1, 2004.

         On December 27, 2000, the Company obtained a $5,000,000 bridge loan
("Bridge Loan") under normal commercial terms from Inberdon Enterprise, Ltd.
("Inberdon"), its majority shareholder. Inberdon owned approximately 51% of the
outstanding Common Stock of the Company at the time that the Bridge Loan was
made. The Bridge Loan was unsecured, carried interest at 9.75% and matured on
March 27, 2001. The Company repaid the Bridge Loan with a portion of the
proceeds of the Company's rights offering which was completed on February 8,
2001. (See Note 4 of Notes to Condensed Consolidated Financial Statements.)

         As of December 31, 2002, the Company had approximately $42,033,000 in
total debt outstanding.

         LIQUIDITY. During the fourth quarter 2000, the Company required
additional capital because the costs to complete both the Arkansas Phase I
project and the new pulverized limestone production line at Texas were
significantly higher than originally anticipated and because the Company's cash
flows and operating profits were lower than expected. To meet its short-term
liquidity demands, the Company determined to make a pro rata rights offering to
its existing shareholders to raise $10,000,000 in additional equity capital. The
Company also obtained the $5,000,000 Bridge Loan from Inberdon.

         The Company commenced the rights offering on December 26, 2000, and it
closed on February 8, 2001. In the rights offering, the Company raised an
additional $10,000,000 in equity capital, realizing net proceeds of $9,551,000,
and issued 1,818,181 shares of Common Stock at the subscription price of $5.50
per share. The Company was able to honor in full all over-subscription requests
from its shareholders. The Company's majority shareholder, Inberdon, subscribed
for its full pro rata amount and also purchased, at the $5.50 per share
subscription price, 461,005 additional shares not purchased by other
shareholders in the rights offering, for a total investment of approximately
$7,630,000. Immediately following the rights offering, Inberdon owned
approximately 59% of the Company's outstanding Common Stock. The net proceeds of
the rights offering were used to repay the $5,000,000 Bridge Loan from Inberdon,
to repay the $4,000,000 outstanding under the Company's revolving credit
facility at that time, and for working capital.

         At March 24, 2003, the outstanding balance on the new $5,000,000
revolving credit facility was approximately $3,000,000. The Company believes
that funds generated from operations and amounts still available under the
revolving credit facility will be sufficient to meet the Company's liquidity and
ongoing capital needs for 2003.

         The following table sets forth the Company's contractual obligations as
of December 31, 2002:

<Table>
<Caption>

                                                              Payments Due by Period  (dollars in thousands)
                                                ---------------------------------------------------------------------
                                                                                                            More than
Contractual Obligations                           Total          1 Year       2-3 Years     4-5 Years       5 Years
-----------------------                        ---------        ------       ---------     ---------       ---------
<S>                                             <C>              <C>          <C>           <C>             <C>
Long-term Debt                                  $  40,833         3,333         6,666        30,834            --

Capital Lease Obligations                       $      --            --            --            --            --

Operating Leases                                $   1,056           234           432           303            87

Purchase Obligations                            $      --            --            --            --            --

Other Liabilities(1)                            $     346           119            33            38           156

Total                                           $  42,235         3,686         7,131        31,175           243
                                                ---------         -----         -----        ------           ---
</Table>


(1) Does not include $409 unfunded projected benefit obligation for a defined
benefit pension plan. Future required contributions, if any, are subject to
actuarial assumptions and future earnings on plan assets. (See Note 6 of Notes
to Consolidated Financial Statements.)

         ENVIRONMENTAL MATTERS. The Company's operations are subject to various
Environmental Laws and regulations concerning air emissions, waste management,
water pollution, and worker health and safety, among other matters. In part in
response to requirements of environmental regulatory agencies, the Company
incurred


                                     - 12 -
<PAGE>


capital expenditures related to environmental activities of approximately
$225,000 in 2002 and $400,000 in 2001. In the judgment of management,
forecastable environmental expenditure requirements for the future are not of
such dimension as to have a materially adverse effect on the Company's financial
condition, results of operations, cash flows, or competitive position.

ADDITIONAL FACTORS.

         SHORT-TERM LIQUIDITY DEMANDS. Funds available under the Company's
revolving credit facility and funds generated from operations should allow the
Company to meet current liquidity demands. However, should the Company's cash
flows from operations deteriorate, the Company may have to obtain additional
financing, and there is no assurance the Company will be able to do so given its
current levels of indebtedness.

         The Company expects that cash from operations and funds available under
its $5,000,000 revolving credit facility should permit the Company to meet its
short-term liquidity demands. Due to the seasonal trends of its sales and
revenues, the Company will need to draw down from this revolving credit facility
during the first half 2003 to provide for necessary repayments of principal and
interest on its $50,000,000 Loan, winter capital projects, normal recurring
capital and re-equipping projects and normal working capital needs. The Company
expects to reduce the outstanding balance of its revolving credit facility
during the second half 2003.

         EFFECTS OF LEVERAGE AND RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S
INDEBTEDNESS. Following the closing of the Company's $50,000,000 Loan, the
Company was more leveraged than it had been in the past. As of December 31,
2002, the Company's total consolidated indebtedness and total stockholders'
equity were $42,033,000 and $38,306,000, respectively, and total indebtedness
represented 52% of total capitalization, compared to 55% in 2001.

         As a result of the Company's net repayment of $4,458,000 of debt during
2002, the Company's debt ratio has improved. However, even with the improved
debt ratio, a substantial portion of the Company's cash flow from operations
will be dedicated to the payment of principal and interest on indebtedness. The
Company's ability to service its debt and to comply with the financial and
restrictive covenants contained in the Loan is subject to financial, economic,
competitive, and other factors. Many of these factors are beyond the Company's
control. In particular, the Company's ability to service its indebtedness will
depend upon its ability to sustain current levels of revenues and cash flows as
a result of the modernization and expansion of the Texas and Arkansas plants.

         FACTORS THAT COULD AFFECT OPERATIONS. In the normal course of the
Company's business, it faces risks that could have a material adverse effect on
its financial position, results of operations, cash flows, and competitive
position. Not all risks are foreseeable or within the Company's ability to
control. These risks arise from factors including, but not limited to,
fluctuating demand for lime and limestone products, the Company's ability to
produce and store quantities of lime and limestone products sufficient to meet
customer demands, the success of the Company's modernization and expansion
strategies, including its ability to execute the strategies and complete
projects on time and within budget, the Company's access to capital, energy
costs especially natural gas prices, inclement weather, and the effects of
seasonal trends.

         ENVIRONMENTAL COMPLIANCE. The Company incurs environmental compliance
costs, including maintenance and operating costs with respect to pollution
control facilities, the cost of ongoing monitoring programs, the cost of
remediation efforts and other similar costs. The Company's operations are
subject to various federal, state, and local environmental laws and regulations,
including the Clear Air Act, the Clean Water Act, the Resource Conservation and
Recovery Act, and the Comprehensive Environmental Response, Compensation, and
Liability Act, as well as the Toxic Substances Control Act. The rate of change
of such legislation has been rapid over the last decade, and compliance can
require significant expenditures.

         Changes in Environmental Laws or discovery of currently unknown
conditions could require additional expenditures by the Company. The EPA is
drafting regulations to control emissions of hazardous air pollutants from lime
plants. Existing facilities will not be subject to the rules until three years
after they are promulgated. Due to the uncertainty of the scope of these
regulations, there is no assurance that the future regulations will not have a
material adverse effect on the Company's financial condition, results of
operations, cash flows or competitive position. The EPA is also seeking
commitments from industry to reduce the production of greenhouse gases, such as
carbon dioxide. The production of carbon dioxide is inherent in the manufacture
of lime and other products, such as cement. Although the EPA's current efforts
to decrease greenhouse gas emissions are voluntary, there is no assurance that a
change in the law will not be adopted that would have a material adverse effect
on the Company's financial condition, results of operations, cash flows or
competitive position. The Company intends to comply with all Environmental Laws,
but because many of the requirements are subjective and therefore not
quantifiable or presently determinable, or may be affected by future legislation
and rulemaking, it is not possible to accurately predict the aggregate future
costs of compliance and their effect on the the Company's financial


                                     - 13 -
<PAGE>


condition, results of operations, cash flows or competitive position. The
Company currently has no material provisions for estimated costs in connection
with expected environmental-related expenditures, because it is impossible to
quantify the impact of all actions regarding environmental matters, particularly
the extent and cost of future remediation and compliance efforts.

         The Company's Operating Air Permits for Arkansas Phase I and Phase II
cover air emissions generated at the facilities and contain stringent criteria
that the new rotary lime kilns and plant must meet. Until both kilns are fully
operational and have demonstrated the ability to comply with the permit
conditions, there can be no assurance that additional capital will not be
required, or operating conditions imposed, in order to achieve compliance.

         COMPLETION OF PHASE II OF THE ARKANSAS PROJECT. The Company still plans
to proceed with Phase II of the Arkansas project and will continue to review the
optimum start-up time based on operating results, market demand, and the ability
to secure competitive construction bids and financing. The future construction
of Arkansas Phase II could also have a material adverse effect on the Company
due to the impact of start-up costs and the potential for under-utilization,
especially in the start-up phase. No assurance can be given that the Phase II
expansion of the Arkansas facility will be completed on time or within budget,
and it may be abandoned due to these or other issues. Further, notwithstanding
current demand for lime and limestone products, the Company cannot guarantee
that it will be able to sell its products once increased production commences,
or that any such sales will be profitable. The Company may decide to incur
additional debt or issue additional equity securities to pay for construction or
other expansion costs, which could have a further dilutive effect on the
ownership interests of current shareholders.

         COMPETITION. The lime industry is highly regionalized and competitive.
The Company's competitors include both public and private companies. The primary
competitive factors in the lime industry are quality, price, ability to meet
customer demand, proximity to the customer, personal relationships and
timeliness of deliveries, with varying emphasis on these factors depending upon
the specific product application. To the extent that one or more of the
Company's competitors becomes more successful with respect to any key
competitive factor, the Company's financial condition, results of operations,
cash flows, and competitive position could be materially adversely affected.
Although demand and prices for lime and limestone have been relatively strong in
recent years, the Company is unable to predict future demand and prices, and
cannot provide any assurance that current levels of demand and prices will
continue or that any future increases in demand or price can be sustained.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


                                 NOT APPLICABLE




                                     - 14 -
<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.


    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS.

    Report of Independent Auditors                                     F-1

    Consolidated Financial Statements:

        Consolidated Balance Sheets as of December 31, 2002 and 2001   F-2

        Consolidated Statements of Operations for the Years Ended
                 December 31, 2002, 2001 and 2000                      F-3

        Consolidated Statements of Stockholders' Equity for
                 the Years Ended December 31, 2002, 2001 and 2000      F-4

        Consolidated Statements of Cash Flows for the Years
                 Ended December 31, 2002, 2001 and 2000                F-5

        Notes to Consolidated Financial Statements                     F-6



                                     - 15 -
<PAGE>


                         REPORT OF INDEPENDENT AUDITORS


The Board of Directors and Stockholders
United States Lime & Minerals, Inc.




We have audited the consolidated balance sheets of United States Lime &
Minerals, Inc. and subsidiaries as of December 31, 2002 and 2001, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 2002. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of United
States Lime & Minerals, Inc. and subsidiaries as of December 31, 2002 and 2001,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States.


                                                ERNST & YOUNG LLP





Dallas, Texas
January 31, 2003



                                     - F 1 -
<PAGE>

                           CONSOLIDATED BALANCE SHEETS
                    (dollars in thousands, except share data)


<Table>
<Caption>


                                                                    DECEMBER 31,
                                                           -------------------------
                                                              2002           2001
                                                           ----------      ----------
<S>                                                        <C>             <C>
ASSETS
Current assets:
     Cash and cash equivalents                             $      226             606
     Trade receivables, net                                     5,202           5,699
     Inventories                                                4,782           5,057
     Prepaid expenses and other assets                            262             796
                                                           ----------      ----------
         Total current assets                                  10,472          12,158

Property, plant and equipment, at cost:
     Land                                                       3,791           3,415
     Building and building improvements                         1,687           1,634
     Machinery and equipment                                  107,097         109,307
     Furniture and fixtures                                     1,022           1,127
     Automotive equipment                                         465             466
                                                           ----------      ----------
                                                              114,062         115,949
     Less accumulated depreciation                            (43,656)        (42,636)
                                                           ----------      ----------
         Property, plant and equipment, net                    70,406          73,313

Deferred tax assets, net                                        2,359           2,453
Other assets, net                                               1,282           1,485
                                                           ----------      ----------

         TOTAL ASSETS                                      $   84,519          89,409
                                                           ==========      ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current installments of debt                          $    4,533           5,658
     Accounts payable - trade                                   2,472           2,543
     Accrued expenses                                             953           1,400
                                                           ----------      ----------
         Total current liabilities                              7,958           9,601

Debt, excluding current installments                           37,500          40,833
Other liabilities                                                 755             468
                                                           ----------      ----------
         TOTAL LIABILITIES                                     46,213          50,902
Commitments and contingencies                                      --              --
Stockholders' equity:
     Preferred stock, $5.00 par value;
         authorized 500,000 shares; none issued                    --              --
     Common stock, $0.10 par value; authorized
         15,000,000 shares; 5,799,845 shares issued at
         December 31, 2002 and 2001                               580             580
     Additional paid-in capital                                10,392          10,392
     Accumulated other comprehensive loss
                                                                 (254)             --
     Retained earnings                                         27,588          27,535
                                                           ----------      ----------
              Total stockholders' equity                       38,306          38,507
                                                           ----------      ----------
         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $   84,519          89,409
                                                           ==========      ==========
</Table>

          See accompanying notes to consolidated financial statements.


                                     - F 2 -
<PAGE>


                      CONSOLIDATED STATEMENTS OF OPERATIONS
                (dollars in thousands, except per share amounts)

<Table>
<Caption>

                                                         YEARS ENDED DECEMBER 31,
                                                  ----------------------------------------
                                                     2002           2001          2000
                                                  ----------     ----------     ----------
<S>                                               <C>            <C>            <C>
Revenues                                          $   39,162         39,753         32,456
Cost of revenues:
     Labor and other operating expenses               23,484         23,371         21,080
     Depreciation, depletion and amortization          6,170          5,917          4,871
                                                  ----------     ----------     ----------
                                                      29,654         29,288         25,951
                                                  ----------     ----------     ----------

         GROSS PROFIT                                  9,508         10,465          6,505

Selling, general and administrative expenses           3,969          4,075          3,936
                                                  ----------     ----------     ----------
         OPERATING PROFIT                              5,539          6,390          2,569

Other expenses:
     Interest expense                                  4,329          3,821          3,155
     Other, net                                          539            380            234
                                                  ----------     ----------     ----------
                                                       4,868          4,201          3,389
                                                  ----------     ----------     ----------

         INCOME (LOSS) BEFORE TAXES                      671          2,189          (820)
Income tax expense (benefit), net                         35            416           (185)
                                                  ----------     ----------     ----------

         NET INCOME (LOSS)                              $636          1,773           (635)
                                                  ==========     ==========     ==========

INCOME (LOSS) PER SHARE OF COMMON STOCK:
     Basic and diluted income (loss) per
       common share                               $     0.11           0.32          (0.16)
                                                  ==========     ==========     ==========
</Table>


          See accompanying notes to consolidated financial statements.


                                     - F 3 -
<PAGE>



                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                             (dollars in thousands)



                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

<Table>
<Caption>

                                  Common Stock
                            --------------------------
                                                                           Accumulated
                                                         Additional           Other
                              Shares                       Paid-In        Comprehensive      Retained     Treasury
                            Outstanding      Amount        Capital            Loss           Earnings      Stock          Total
                            ------------    ----------   ------------    ----------------    ---------    ---------    ----------
<S>                         <C>             <C>          <C>             <C>                 <C>          <C>          <C>
BALANCES AT
    DECEMBER 31, 1999          3,981,664    $       529         14,819             --         27,376        (13,927)        28,797
   Common stock
      dividends                       --             --             --             --           (400)            --           (400)
   Net loss                           --             --             --             --           (635)            --           (635)
                                                                                                                       -----------
     Comprehensive loss               --             --             --             --             --             --           (635)
                             -----------    -----------    -----------    -----------    -----------    -----------    -----------
BALANCES AT
    DECEMBER 31, 2000          3,981,664    $       529         14,819             --         26,341        (13,927)        27,762
   Stock issued pursuant
      to rights offering,
   net                         1,818,181             51         (4,427)            --             --         13,927          9,551
   Common stock
      dividends                       --             --             --             --           (579)            --           (579)
      Net income                      --             --             --             --          1,773             --          1,773
                                                                                                                       -----------
     Comprehensive
        income                        --             --             --             --             --             --          1,773
                             -----------    -----------    -----------    -----------    -----------    -----------    -----------
BALANCES AT
    DECEMBER 31, 2001          5,799,845    $       580         10,392             --         27,535             --         38,507
   Common stock
      dividends                       --             --             --             --           (583)            --           (583)
     Net income                       --             --             --             --            636             --            636
   Minimum pension
      liability adjustment,
      net of $155 tax
   benefit                            --             --             --           (254)            --             --           (254)
                                                                                                                       -----------
    Comprehensive
        income                        --             --             --             --             --             --            382
                             -----------    -----------    -----------    -----------    -----------    -----------    -----------
BALANCES AT
    DECEMBER 31, 2002          5,799,845    $       580         10,392           (254)        27,588             --         38,306
                             ===========    ===========    ===========    ===========    ===========    ===========    ===========
</Table>


           See accompanying notes to consolidated financial statements.



                                     - F 4 -
<PAGE>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)

<Table>
<Caption>
                                                                YEARS ENDED DECEMBER 31,
                                                          --------------------------------------
                                                             2002          2001          2000
                                                          ----------    ----------    ----------
<S>                                                       <C>           <C>           <C>
OPERATING ACTIVITIES:
Net income (loss)                                         $      636         1,773          (635)
     Adjustments to reconcile net income (loss)
        to net cash provided by operations:
         Depreciation, depletion and amortization              6,427         6,149         5,030
         Amortization of financing costs                         230           191           271
         Deferred income taxes (benefit)                          --            --          (317)
         Loss on sale of assets                                   30             9            76
         Changes in operating assets and liabilities:
            Trade receivables                                    497        (1,598)           65
            Inventories                                          275          (825)           34
            Prepaid expenses                                     534          (533)         (390)
            Other assets                                         (31)          150            (1)
            Accounts payable and accrued expenses               (269)       5,722        (5,312)
                  Other liabilities                             (122)          196           (86)
                                                          ----------    ----------    ----------

         Total adjustments                                     7,571        (1,573)       10,404
                                                          ----------    ----------    ----------
         Net cash provided by operations                  $    8,207           200         9,769

INVESTING ACTIVITIES:
     Purchase of property, plant and equipment            $   (3,622)       (4,113)      (33,730)
     Proceeds from sale of property, plant and
       equipment                                                  76           309            87
                                                          ----------    ----------    ----------
         Net cash used in investing activities            $   (3,546)       (3,804)      (33,643)

FINANCING ACTIVITIES:
     Payment of common stock dividends                    $     (583)         (579)         (400)
     Proceeds from borrowings                                  1,750         3,325        13,825
     Repayments of debt                                       (6,208)      (13,159)       (2,500)

     Proceeds from issuance of common stock pursuant to
         rights offering, net                                     --         9,551            --
                                                          ----------    ----------    ----------
         Net cash provided by (used in) financing
            activities                                    $   (5,041)         (862)       10,925
                                                          ----------    ----------    ----------
         Net decrease in cash and cash equivalents              (380)       (4,466)      (12,949)
     Cash and cash equivalents at beginning of year              606         5,072        18,021
                                                          ----------    ----------    ----------
     Cash and cash equivalents at end of year             $      226           606         5,072
                                                          ==========    ==========    ==========
</Table>


          See accompanying notes to consolidated financial statements.



                                     - F 5 -
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (dollars in thousands, except per share amounts)

                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000


(1)      Summary of Significant Accounting Policies

         (a)  Organization

              The Company is a manufacturer of lime and limestone products
              supplying primarily the agriculture, construction, municipal
              sanitation and water treatment, paper and steel industries. The
              Company is headquartered in Dallas, Texas and operates lime and
              limestone plants in Arkansas, Colorado and Texas through its
              wholly owned subsidiaries, Arkansas Lime Company, Colorado Lime
              Company and Texas Lime Company, respectively.

         (b)  Principles of Consolidation

              The consolidated financial statements include the accounts of the
              Company and its subsidiaries. All material intercompany balances
              and transactions have been eliminated.

         (c)  Use of Estimates

              The preparation of the financial statements in conformity with
              accounting principles generally accepted in the United States
              requires management to make estimates and judgements that affect
              the amounts reported in the financial statements and accompanying
              notes. Actual results could differ from those estimates.

         (d)  Statements of Cash Flows

              For purposes of reporting cash flows, the Company considers all
              certificates of deposit and highly-liquid debt instruments, such
              as U.S. Treasury bills and notes, with original maturities of
              three months or less to be cash equivalents. Cash equivalents are
              carried at cost plus accrued interest, which approximates fair
              market value.

              Supplemental cash flow information is presented below:

<Table>
<Caption>

                                                             YEAR ENDED DECEMBER 31,
                                                          ------------------------------
                                                            2002       2001       2000
                                                          --------   --------   --------
<S>                                                       <C>        <C>        <C>
Cash paid during the year for:
     Interest                                             $  4,099      4,512      4,774
                                                          ========   ========   ========
     Income taxes, net of refunds                         $     83        296        659
                                                          ========   ========   ========
</Table>


         (e)  Revenue Recognition

              The Company recognizes revenue in accordance with the terms of its
              contracts, which are generally upon shipment.


         (f)  Trade Receivables

              The majority of the Company's trade receivables are unsecured.
              Payment terms for all trade receivables are contractually based.
              Credit losses relating to these receivables consistently have been
              within management expectations. Trade receivables are presented
              net of the related allowance for doubtful accounts, which totaled
              $125 and $140 at December 31, 2002 and 2001, respectively.


                                     - F 6 -
<PAGE>




             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)


         (g)  Inventories

              Inventories are valued principally at the lower of cost,
              determined using the average cost method, or market. Costs include
              materials, labor, and production overhead.

              A summary of inventories is as follows:

<Table>
<Caption>

                                                         DECEMBER 31,
                                                     ---------------------
                                                       2002       2001
                                                    ---------   ---------
<S>                                                 <C>         <C>
              Lime and limestone inventories:
                   Raw materials                    $   1,704       1,983
                   Finished goods                         942         927
                                                    ---------   ---------
                                                        2,646       2,910
              Service parts inventories                 2,136       2,147
                                                    ---------   ---------
                                                    $   4,782       5,057
                                                    =========   =========
</Table>

         (h)  Property, Plant and Equipment

              For major constructed assets, the capitalized cost includes the
              cash price paid by the Company for labor and materials plus
              interest and project management costs that are directly related to
              the constructed assets. Total interest costs of $0, $845 and
              $1,600 were capitalized for the years ended December 31, 2002,
              2001 and 2000, respectively. Depreciation of property, plant and
              equipment is being provided for by the straight-line and
              declining-balance methods over estimated useful lives as follows:

<Table>

<S>                                                       <C>
                    Buildings and building improvements   3 - 40 years
                    Machinery and equipment               3 - 20 years
                    Furniture and fixtures                3 - 10 years
                    Automotive equipment                  3 -  8 years
</Table>

              Maintenance and repairs are charged to expense as incurred;
              renewals and betterments are capitalized. When units of property
              are retired or otherwise disposed of, their cost and related
              accumulated depreciation are removed from the accounts, and any
              resulting gain or loss is credited or charged to income.

              The Company reviews its long-term assets for impairment in
              accordance with the guidelines of Statement of Financial
              Accounting Standards No. 144, "Accounting for the Impairment or
              Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 requires
              that, when events or circumstances indicate that the carrying
              amount of an asset may not be recoverable, the Company should
              determine if impairment of value exists. If the estimated
              undiscounted future net cash flows are less than the carrying
              amount of the assets, an impairment exists and an impairment loss
              must be calculated and recorded. If an impairment exists, the
              impairment loss is calculated based on the excess of the carrying
              amount of the asset over the asset's fair value. Any impairment
              loss is treated as a permanent reduction in the carrying value of
              the assets. Through December 31, 2002, no events or circumstances
              have arisen which would require the Company to record a provision
              for impairment on its long-lived assets.


                                     - F 7 -
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)


         (i)  Other Assets

              Other assets consist of the following:

<Table>
<Caption>

                                                     DECEMBER 31,
                                                ---------------------
                                                  2002        2001
                                                ---------   ---------
<S>                                             <C>         <C>
              Deferred stripping costs          $     273         239
              Prepaid financing costs                 996       1,229
              Other                                    13          17
                                                ---------   ---------
                                                $   1,282       1,485
                                                =========   =========
</Table>

              Deferred stripping costs, all of which relate to Arkansas Lime
              Company, will be amortized using the units-of-production method.
              Deferred financing costs are expensed over the shorter of the life
              of the debt or expected life of the loan using the straight-line
              method.

         (j)  Environmental Expenditures

              Environmental expenditures that relate to current operations are
              expensed or capitalized as appropriate. Expenditures that relate
              to an existing condition caused by past operations, and which do
              not contribute to current or future revenue generation, are
              expensed. Liabilities are recorded when environmental assessments
              and/or remedial efforts are probable, and the costs can be
              reasonably estimated. Generally, the timing of these accruals will
              coincide with completion of a feasibility study or the Company's
              commitment to a formal plan of action. In part in response to
              requirements of environmental regulatory agencies, the Company
              incurred capital expenditures related to environmental matters of
              approximately $225 in 2002 and $400 in 2001.

         (k)  Income (loss) Per Share of Common Stock

              Effective December 31, 1997, Statement of Financial Accounting
              Standards No. 128, "Earnings per Share" ("SFAS 128"), was
              implemented by the Company. SFAS 128 requires the presentation of
              basic and diluted income (loss) per common share for all periods
              presented.

              The following table sets forth the computation of basic and
              diluted income (loss) per common share:


<Table>
<Caption>

                                                                      YEAR ENDED DECEMBER 31,
                                                            ------------------------------------------
                                                               2002           2001            2000
                                                            ------------   ------------   ------------
<S>                                                         <C>            <C>            <C>
              Numerator:
                Net income (loss) for basic and
                 diluted income (loss) per common share     $        636          1,773           (635)
                                                            ============   ============   ============

              Denominator:
                Denominator for basic income (loss) per
                 common share - weighted-average shares        5,799,845      5,602,875      3,981,664

                Effect of dilutive securities:
                 Employee stock options                               --             --             --
                                                            ------------   ------------   ------------
                Denominator for diluted income (loss) per
                  common share - adjusted weighted-
                  average shares and assumed exercises         5,799,845      5,602,875      3,981,664
                                                            ============   ============   ============

              Basic and diluted income(loss) per
                  common share                              $       0.11           0.32          (0.16)
                                                            ============   ============   ============
</Table>



                                     - F 8 -
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)

         (l)  Stock Options

              The Company has elected to follow Accounting Principles Board
              Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB
              25"), in accounting for its employee stock options. Under APB 25,
              if the exercise price of an employee's stock options equals or
              exceeds the market price of the underlying stock on the date of
              grant, no compensation expense is recognized. The Company adopted
              Statement of Financial Accounting Standards No. 123, "Accounting
              for Stock-Based Compensation" ("SFAS 123"), in 1996. SFAS 123
              requires companies that elect to continue applying the provisions
              of APB 25 to provide pro forma disclosures for employee stock
              compensation awards as if the fair-value-based method defined in
              SFAS 123 had been applied. See Note 7.

              The following table illustrates the effect on net income (loss)
              and income (loss) per share of common stock if the Company had
              applied the fair value recognition provisions of SFAS 123 instead
              of APB 25's intrinsic value method to account for stock-based
              employee compensation:

<Table>
<Caption>


                                                                YEAR ENDED DECEMBER 31,
                                                              ---------------------------
                                                               2002       2001      2000
                                                              ---------------------------
<S>                                                           <C>        <C>        <C>
              Net income (loss) as reported                   $  636     1,773      (635)
              Stock-based employee compensations expense,
                  net of income taxes                         $  (33)      (70)     (177)
                                                              ------     -----      ----

              Pro forma net income (loss)                     $  603     1,703      (812)
                                                              ======     =====      ====
              Basic and diluted income (loss) per common
                   share, as reported                          $0.11      0.32     (0.16)

              Pro forma basic and diluted income (loss) per
                   common share                               $ 0.10      0.30     (0.20)
</Table>


              The fair value for these options was estimated at the date of
              grant using the Black-Scholes option valuation model, with the
              following weighted average assumptions for the 2001 and 2000
              grants: a risk-free interest rate of 5.34% in 2001 and 6.63% in
              2000; a dividend yield of 2%; and a volatility factor of 0.33 in
              2001 and 0.31 in 2000. In addition, the fair value of these
              options was estimated based on an expected life of three years.

         (m)  Gas Future Contracts

              In June 1998, the Financial Accounting Standards Board ("FASB")
              issued Statement of Financial Accounting Standards No. 133,
              "Accounting for Derivative Instruments and Certain Hedging
              Activities" ("SFAS 133"). In June 2000, the FASB issued Statement
              of Financial Accounting Standards No. 138, "Accounting for Certain
              Derivative Instruments and Certain Hedging Activity, an Amendment
              to SFAS 133" ("SFAS 138"). SFAS 133 and SFAS 138 require that all
              derivative instruments be recorded on the balance sheet at their
              respective fair values. The Company adopted SFAS 133 and SFAS 138
              on January 1, 2001, at which time it was not a party to any
              derivative financial instruments. From time to time, the Company
              has entered into forward purchase contracts for the delivery of a
              portion of the natural gas requirements of its plants. As of
              December 31, 2002, the Company had no open forward purchase
              contracts. As of December 31, 2001, the Company had commitments to
              purchase, under two forward purchase contracts, a total of
              15MM/BTU per month for the months of January, February, and March
              2002. The delivery prices in dollars for these volumes averaged
              $3.51 per MM/BTU. The


                                     - F 9 -
<PAGE>




             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)

              market prices in dollars for deliveries in these months as of
              December 31, 2001 were $2.60 per MM/BTU for January deliveries and
              $2.65 per MM/BTU for February and March deliveries. The Company
              elected not to designate these instruments as hedges for
              accounting purposes. Accordingly, the Company recorded a
              mark-to-market adjustment of $39 within labor and other operating
              expenses at December 31, 2001. Cash settlements of these
              instruments were included in labor and other operating expenses.

         (n)  Comprehensive Income

              The Company follows Statement of Financial Accounting Standards
              No. 130, "Reporting Comprehensive Income" ("SFAS 130"), which
              provides standards for reporting and displaying comprehensive
              income. Comprehensive income is defined as the change in equity of
              a business enterprise during a period from transactions and other
              events from non-owner sources. See Note 6.

         (o)  Accounting for Asset Retirement Obligations

              In June 2001, the FASB issued Statement of Financial Accounting
              Standards No. 143, "Accounting for Asset Retirement Obligations"
              ("SFAS 143"), which is effective for fiscal years beginning after
              June 15, 2002. SFAS 143 requires legal obligations associated with
              the retirement of long-lived assets to be recognized at their fair
              value at the time that the obligations are incurred. Upon initial
              recognition of a liability, that cost should be capitalized as
              part of the related long-lived asset and allocated to expense over
              the useful life of the asset. The Company adopted SFAS 143
              effective January 1, 2003 and, based on current circumstances,
              does not believe that the impact of adoption of SFAS 143 will have
              a material impact on the Company's financial position, results of
              operations, cash flows or competitive position.

(2) Embezzlement Matter and Restatements and Reclassification of Previously
    Reported Amounts

         On January 31, 2002, the Company announced that it had discovered that
an employee who recently left the Company may have improperly diverted Company
funds without authorization. Trading in the Company's common stock on the Nasdaq
National Market(R) ("Nasdaq") was halted, and the Audit Committee of the
Company's Board of Directors retained outside counsel to conduct a special
investigation into the matter. The Audit Committee also retained an independent
accounting firm to review the Company's internal controls and to make
recommendations for improvement which the Company has implemented. The Company
also contacted the Securities and Exchange Commission (the "SEC"), as well as
criminal authorities, and cooperated with the SEC, Nasdaq, and criminal
authorities with respect to their investigations into this matter.

         The Company's former Vice President - Finance, Controller, Treasurer,
and Secretary, Larry Ohms (the "Former VP Finance"), over a period of four years
beginning in 1998, embezzled $2,179 from the Company. The Former VP Finance
voluntarily resigned from the Company on January 22, 2002, approximately one
week before the Company discovered the defalcations. The Company has since filed
suit against the Former VP Finance. The Former VP Finance has stated that no one
else at the Company was involved in perpetrating the embezzlements. Based on the
results of the special investigation, the Company believes this statement to be
accurate.

         On March 14, 2002, the Company received $500 in insurance proceeds from
the Company's insurance policies covering employee theft. The $500 was recorded
on the Consolidated Balance Sheet at December 31, 2001 in prepaid expenses and
other assets, and recognized in the Consolidated Statement of Operations in
other income in the fourth quarter 2001. In addition, the Company retained
counsel for assistance in its efforts to recover the embezzled funds from the
Former VP Finance, and to pursue possible civil actions on behalf of the Company
against third parties. The Former VP Finance has claimed not to have any funds.
Any future recoveries are being recognized in the quarters in which they are
realized, and the cost associated with the Company's special investigation, the
Company's cooperation with the SEC, Nasdaq, and criminal authorities in their
investigations and the Company's ongoing recovery efforts are being expensed as
incurred. During 2002, no additional recoveries were realized. During 2002, the
Company recorded $648 ($0.11 per basic and diluted share), net of income tax
benefits ($683 gross) for embezzlement-related costs.

                                    - F 10 -
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)


         Of the total amount embezzled, $126 was embezzled during 1998, $282 was
embezzled during 1999, $791 was embezzled during 2000, and $980 was embezzled
during 2001. The Former VP Finance used a variety of methods to hide the
embezzlements. Funds embezzled during 1998 were improperly expensed to selling,
general and administrative expenses. Funds embezzled during 1999 were improperly
expensed to labor and other operating expenses. Of the $791 that was embezzled
in 2000, $328 was improperly expensed to labor and other operating expenses, and
$463 was improperly recorded as prepaid financing costs within other assets,
net. Funds embezzled during 2001 totaling $980 were also improperly recorded as
prepaid financing costs in other assets, net. As a result of the fraudulent
entries in other assets, net during 2000 ($463) and 2001 ($980), the Company
improperly recognized excess amortization of its prepaid financing costs, as a
component of interest expense, of $19 for the year ended December 31, 2000 and
$166 for the nine months ended September 30, 2001.

         As a result of the embezzlements, the Company reclassified to other
expenses $126 in 1998 and $282 in 1999, and removed those amounts from selling,
general and administrative expenses, and labor and other operating expenses,
respectively. The embezzlements had a material effect on the Company's
consolidated financial statements for fiscal year 2000. Therefore, the Company
restated its financial statements for 2000. In addition to the correction for
the overstated prepaid financing costs in 2000 and the reclassification of
excess interest expense to other expenses, the Company's restatement resulted in
an additional loss of $344 ($0.09 per basic and diluted share), net of income
tax benefits ($444 gross) in 2000.

(3) Banking Facilities and Other Debt

         On April 22, 1999, the Company entered into a credit agreement with a
consortium of commercial banks for a $50,000 Senior Secured Term Loan (the
"Loan"). The Loan is repayable over a period of approximately eight years,
maturing on March 30, 2007, and requires monthly principal payments of $278,
which began April 30, 2000, with a final principal payment of $26,944 on March
30, 2007, which equates to a 15-year amortization. The Company paid a fee
equivalent to 2-1/2% of the Loan value to the placement agent.

         Upon execution of the Loan agreement, the first $30,000 was advanced,
of which approximately $20,000 was used to retire all existing bank loans, with
the balance used primarily for Phase I of the Arkansas modernization and
expansion project. Under the terms of the Loan agreement, the remaining $20,000
of the Loan facility was drawn down in four equal quarterly installments
beginning June 30, 1999, and ending March 30, 2000.

         The interest rate on the first $30,000 of the Loan is 8.875%. The
subsequent installments bear interest from the date they were funded at 3.52%
above the secondary market yield of the United States Treasury obligation
maturing May 15, 2005. The blended rate for the additional $20,000 is 9.84%.

         The Loan is secured by a first lien on substantially all of the
Company's assets, with the exception of accounts receivable and inventories
which secure the Company's $5,000 revolving credit facility. The Loan agreement
contains covenants that restrict the incurrence of debt, guaranties, and liens,
and places certain restrictions on the payment of dividends and the sale of
significant assets. The Company is also required to meet minimum debt service
coverage ratios on an on-going basis and maintain a minimum level of tangible
net worth.

         On April 26, 2001, the Company renewed its revolving credit facility,
with a new maturity date of May 31, 2002. The revolving credit facility was
increased from $4,000,000 to $5,000,000 and bears interest at LIBOR plus a
margin of 1.40% to 3.55% in accordance with a defined rate spread based upon the
Company's then-current ratio of total funded debt to earnings before interest,
taxes, depreciation and amortization (EBITDA). On December 31, 2001, the Company
amended the revolving credit facility to extend the maturity date to July 31,
2002 and to allow for a contractual overadvance above the borrowing base
limitation as previously stated in the facility in an amount not to exceed $750
that expired on July 31, 2002. The $5,000 revolving credit facility was further
amended on May 31, 2002 to extend the maturity date to January 31, 2003 and on
January 31, 2003, to extend the maturity date to July 31, 2003. At December 31,
2002, the outstanding balance on the revolving credit facility was $1,200. The
average interest rates were 4.15% and 7.46% for 2002 and 2001, respectively.

         On December 27, 2000, the Company obtained a $5,000 bridge loan
("Bridge Loan") under normal commercial terms from Inberdon Enterprise, Ltd.
("Inberdon"), its majority shareholder. Inberdon owned approximately 51% of the
outstanding stock of the Company at the time that the Bridge Loan was made. The


                                    - F 11 -
<PAGE>




             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)


Bridge Loan was unsecured, carried interest at 9.75% and matured on March 27,
2001. The Company repaid the Bridge Loan with a portion of the proceeds of the
Company's rights offering which was completed on February 8, 2001. See Note 4.

         As of December 31, 2002, the Company had approximately $42,033 in total
debt outstanding. A summary of debt is as follows:

<Table>
<Caption>

                                                          DECEMBER 31,
                                                     -----------------------
                                                        2002         2001
                                                     ----------   ----------
<S>                                                  <C>              <C>
              Term loan                              $   40,833       44,166
              Revolving credit facility                   1,200        2,325
                                                     ----------   ----------
                   Subtotal                              42,033       46,491

              Less current installments                   4,533        5,658
                                                     ----------   ----------

              Debt, excluding current installments   $   37,500       40,833
                                                     ==========   ==========
</Table>



         Amounts payable on the Company's long-term debt outstanding as of
December 31, 2002 to be paid in 2004 and thereafter are: 2004 - $3,333; 2005 -
$3,333; 2006 - $3,333; 2007 - $27,501.

         The carrying amount of the Company's long-term debt approximates its
fair value.


(4)      Stockholders' Equity

         On December 26, 2000, the Company initiated a rights offering for
$10,000. The rights offering allowed each shareholder to receive 0.4566
non-transferable subscription rights for each share of the Company's common
stock owned on December 26, 2000. The purchase price for the subscription was
$5.50 per share, and the rights offering expired on February 5, 2001.

         The Company received $10,000 ($9,551 net of offering costs) and issued
an additional 1,818,181 shares of common stock effective February 8, 2001. In
the rights offering, the Company honored the over-subscription requests of its
shareholders in full. The Company's majority shareholder, Inberdon, subscripted
to its full pro-rata amount and, in addition, purchased 461,005 shares not
purchased by other shareholders in the rights offering. Immediately following
the rights offering, Inberdon owned approximately 59% of the Company's common
stock.

         The $254 accumulated other comprehensive loss resulted from an unfunded
projected benefit obligation for a defined benefit pension plan. See Note 6.

(5)      Income Taxes

         Income tax expense (benefit), net for the years ended December 31,
2002, 2001 and 2000, is as follows:

<Table>
<Caption>

                                                   2002      2001      2000
                                                  -------   -------   -------
<S>                                               <C>           <C>       <C>
              Current income tax expense          $    35       416       132
              Deferred income tax benefit              --        --      (317)
                                                  -------   -------   -------

              Income tax expense (benefit), net   $    35       416      (185)
                                                  =======   =======   =======
</Table>


                                    - F 12 -
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)


         A reconciliation of income taxes computed at the federal statutory rate
to income tax expense (benefit), net for the years ended December 31, 2002, 2001
and 2000, is as follows:

<Table>
<Caption>


                                                            2002                     2001                   2000
                                                   -----------------------  ---------------------    ---------------------
                                                                 Percent                 Percent                  Percent
                                                                of pretax               of pretax                of pretax
                                                    Amount       income      Amount       income      Amount       income
                                                   --------      -------    --------      ------     --------    --------
<S>                                                <C>          <C>         <C>         <C>          <C>             <C>
              Income taxes (benefit) computed at
                 the federal statutory rate        $    228        34.0%    $    744        34.0%    $   (279)       34.0%
              Increase (reduction) in
                 taxes resulting from:
                   Statutory depletion in
                     excess of cost depletion          (539)      (80.4)        (644)      (29.4)        (250)      (30.5)
                   State income taxes, net of
                     federal income tax benefit          23         3.4           79         3.6          255       (31.1)
                   Other                                323        48.2          237        10.8           89       (10.9)
                                                   --------      -------    --------      ------     --------    --------
              Income tax expense (benefit), net    $     35         5.2%    $    416        19.0%    $   (185)       22.5%
                                                   ========      ======     ========      ======     ========      ======
</Table>


         As reported in the Company's consolidated financial statements and
notes contained in its Form 10-K for the year ended December 31, 1996, the
Company had deferred tax assets which were previously fully reserved by a
valuation allowance in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). The unrecognized
deferred tax assets related primarily to net operating loss carryforwards,
general business credit carryforwards, and alternative minimum tax credit
carryforwards.

         Generally, the provisions of SFAS 109 require deferred tax assets to be
reduced by a valuation allowance if, based on the weight of available evidence,
it is "more likely than not" that some portion or all of the deferred tax assets
will not be realized. SFAS 109 requires an assessment of all available evidence,
both positive and negative, to determine the amount of any required valuation
allowance. No benefit was given to the deferred tax assets at December 31, 1996
due to uncertainties related to their utilization.

         As a result of the sale of the Corson Lime Company assets in 1997, the
Company reviewed the deferred tax assets and concluded that the uncertainties as
to their realization had been favorably resolved, in that the net operating loss
carryforwards and the general business credit carryforwards were expected to be
fully utilized. The Company's prospects for future taxable income, enhanced by
the sale of the Corson assets, indicated future utilization of the alternative
minimum tax credit carryforwards in the future. The post-Corson sale assessment
as to the ultimate realization of the deferred tax assets indicated that it was
more likely than not that the deferred tax assets would be realized. As a
result, the Company reduced the deferred tax asset valuation allowance in the
second quarter 1997 by $2,300, recording the deferred tax assets and recognizing
that amount in federal and state income tax expense (benefit), net.

         At December 31, 2002, the Company had deferred tax liabilities of
$1,148, a valuation allowance of $1,270 and deferred tax assets of $4,777. The
principal temporary differences related to the deferred tax liabilities was
property. The principal temporary difference related to the deferred tax assets
was the alternative minimum tax credit carryforward of $3,809.

         At December 31, 2001, the Company had deferred tax liabilities of $332,
a valuation allowance of $1,256 and deferred tax assets of $4,041. The principal
temporary difference related to the deferred tax liabilities was property. The
principal temporary difference related to the deferred tax assets was the
alternative minimum tax credit carryforward of $3,695.

         Due to uncertainties about realizing deferred tax assets beyond what
has already been recognized, any increases in the Company's calculated deferred
tax assets are currently being fully reserved in a deferred tax assets valuation
allowance account. The Company will continue to evaluate this reserve.


                                    - F 13 -
<PAGE>



             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)

(6)      Employee Retirement Plans

         The Company has a noncontributory defined benefit pension plan (the
"Corson Plan") that covered substantially all union employees previously
employed by its wholly-owned subsidiary, Corson Lime Company. In June 1997, the
Company sold substantially all of the assets of Corson Lime Company and all
benefit accruals under the Corson Plan ceased as of July 31, 1997. During 1997
and 1998, the Company made contributions to the Corson Plan that were intended
to fully fund a number of the benefits earned by the participants. The Company
has made no contributions to the Corson Plan since 1998. In recent years,
significant declines in the financial markets have unfavorably impacted plan
asset values resulting in an unfunded projected benefit obligation of $409 at
December 31, 2002. As a result, the Company recorded other comprehensive loss of
$254, net of $155 tax benefits.

         The following table sets forth the funded status of the Corson Plan
accrued pension benefits at December 31:

<Table>
<Caption>

                                                             2002          2001
                                                          ----------    ----------
<S>                                                       <C>           <C>
              Change in benefit obligation:
                Benefit obligation at beginning of year   $    1,461         1,473
                Interest cost                                    112           113
                Actuarial loss (gain)                             88           (14)
                Benefits paid                                   (115)         (111)
                                                          ----------    ----------
                Benefit obligation at end of year         $    1,546         1,461
                                                          ==========    ==========

              Change in plan assets:
                Fair value of plan assets at beginning
                  of year                                 $    1,411         1,636
                Actual loss on plan assets                      (159)         (114)
                Benefits paid                                   (115)         (111)
                                                          ----------    ----------
                Fair value of plan assets at end of
                  year                                    $    1,137         1,411

              Funded Status:
                Underfunded status                        $     (409)          (50)
                Unrecognized net actuarial loss                   --            50
                                                          ----------    ----------
                Net liability recognized                  $     (409)           --
                                                          ==========    ==========
</Table>

         The net liability recognized in the consolidated balance sheets at
December 31 consists of the following:


<Table>
<Caption>

                                                            2002             2001
                                                            ----             ----
                <S>                                       <C>                <C>
                Accrued benefit cost                      $  409              --
</Table>

         The weighted average assumptions used in the measurement of the Corson
Plan benefit obligation are as follows:

<Table>
<Caption>

                                                              DECEMBER 31 ,
                                                         --------------------
                                                           2002        2001
                                                         --------    --------
<S>                                                      <C>         <C>
              Discount rate                                  7.50%       8.00%
              Expected long-term return on plan assets       9.00%       9.00%
</Table>

         The following table provides the components of the Corson Plan net
periodic benefit cost:

<Table>
<Caption>

                                                          YEAR ENDED DECEMBER 31,
                                                   --------------------------------------
                                                      2002          2001          2000
                                                   ----------    ----------    ----------
<S>                                                <C>           <C>           <C>
              Interest cost                        $      112           113           113
              Expected return on plan assets             (121)         (142)         (146)
              Amortization of net actuarial loss           19            29            33
                                                   ----------    ----------    ----------
              Net periodic benefit cost            $       10            --            --
                                                   ==========    ==========    ==========
</Table>


                                    - F 14 -
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)

         The Company has a contributory retirement (401(k)) savings plan for
nonunion employees. The Company contributions to the plan were $57 during 2002,
$59 during 2001 and $57 during 2000. The Company also has contributory
retirement (401(k)) savings plans for union employees of Arkansas Lime Company
and Texas Lime Company. The Company contributions to these plans were $32 in
2002, $36 in 2001 and $28 in 2000.

         In December 1986, the Company purchased 1,550,000 shares of its
outstanding common stock, accounted for as treasury stock at December 31, 2000,
for $10.50 per share. Subsequent to that purchase, 300,000 shares, after stock
split, were sold to the Employee Stock Ownership Plan ("ESOP") for $8.20 per
share. The ESOP covered substantially all full-time nonunion employees and was
designed to invest primarily in the Company's common stock. Effective July 31,
1999, the Company merged the ESOP into the 401(k) savings plan for nonunion
employees. Contributions to the ESOP are discretionary. The Company did not make
any contributions during 2002, 2001 or 2000.

(7)      Stock Option Plans

         On April 27, 2001, the Company implemented the 2001 Long-Term Incentive
Plan (the "2001 Plan") that replaced the 1992 Stock Option Plan (the "1992
Plan"). In addition to stock options, the 2001 Plan, unlike the 1992 Plan,
provides for the grant of stock appreciation rights, restricted stock, deferred
stock, and other stock-based awards to officers and employees. The 2001 Plan
also makes directors and consultants eligible for grants of stock options and
other awards. The 1992 Plan only provided for grants to key employees. As a
result of the adoption of the 2001 Plan, no further grants will be made under
the 1992 Plan, but the terms of the 1992 Plan will continue to govern options
that remain outstanding under the 1992 Plan.

         The number of shares of common stock that may be subject to outstanding
awards granted under the 2001 Plan (determined immediately after the grant of
any award) may not exceed 475,000. In addition, no individual may receive awards
in any one calendar year relating to more than 100,000 shares of common stock.
The options under both the 2001 Plan and 1992 Plan expire ten years from the
date of grant and generally become exercisable after the expiration of one year
from the grant date.

         As of December 31, 2002, the number of shares remaining available for
future grant under the 2001 Plan was 425,000. A summary of the Company's stock
option activity and related information for the years ended December 31, 2002,
2001 and 2000 is as follows:

<Table>
<Caption>

                                                           2002                         2001                        2000
                                                --------------------------   --------------------------   -------------------------
                                                                 Weighted                    Weighted                   Weighted
                                                                 Average                     Average                    Average
                                                                 Exercise                    Exercise                   Exercise
                                                   Options        Price        Options         Price        Options       Price
                                                -----------    -----------   -----------    -----------   -----------   -----------
<S>                                             <C>            <C>           <C>        <C>               <C>       <C>
              Outstanding at beginning of year      253,500    $      6.68       194,000    $      7.45       189,000   $      7.47
                 Granted                                 --             --        80,000           5.15         5,000          6.75
                 Exercised                               --             --            --             --            --            --
                 Forfeited                          (28,500)          7.75       (20,500)          7.98            --            --
                                                -----------    -----------   -----------    -----------   -----------   -----------
              Outstanding at end of year            225,000           6.55       253,500           6.68       194,000          7.45
                                                ===========    ===========   ===========    ===========   ===========   ===========
              Exercisable at end of year            225,000           6.55       173,500           7.39       189,000          7.61
                                                ===========    ===========   ===========    ===========   ===========   ===========
              Weighted average fair value of
                 options granted during the
                   year                                        $        --                  $      1.15                 $      1.69
                                                               ===========                  ===========                 ===========
              Weighted average remaining
                 contractual life in years                            5.03                         6.26                        6.83
                                                               ===========                  ===========                 ===========
</Table>


                                    - F 15 -
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)


         The following table summarizes information about options outstanding at
December 31, 2002:

<Table>
<Caption>


                                       Weighted Average Remaining
        Exercise Price                  Contractual Life (Years)             Number of Shares
        --------------                 --------------------------            ----------------
<S>                                    <C>                                   <C>
            $  4.75                            0.92                              20,000
            $  8.25                            2.88                              50,000
            $  7.00                            5.14                              40,000
            $  8.00                            6.88                              30,000
            $  6.75                            7.13                               5,000
            $  5.50                            8.01                              30,000
            $  4.94                            8.50                              50,000
                                               ----                             -------
              Totals:                          5.03                             225,000

</Table>

(8)      Commitments and Contingencies

         The Company leases some of the equipment used in its operations.
Generally, the leases are for periods varying from one to five years and are
renewable at the option of the Company. Total rent expense was $435 for 2002,
$403 for 2001, and $231 for 2000. As of December 31, 2002, future minimum
payments under noncancelable operating leases were $234 for 2003, $216 for 2004,
2005 and 2006, $87 for 2007 and 2008, and $44 for 2009.

         The Company is party to lawsuits and claims arising in the normal
course of business, none of which, in the opinion of management, is expected to
have a material adverse effect on the Company's financial condition, results of
operation, cash flows, or competitive position. With respect to the
embezzlements discussed in Note 2, the costs associated with the Company's
special investigation, the Company's cooperation with the SEC, Nasdaq, and
criminal authorities in their investigations, and the Company's ongoing recovery
efforts are recognized as other expense, net, as incurred.

         From time to time, the Company receives claims from federal and state
environmental agencies asserting that the Company is or may be in violation of
environmental laws. In 2002, one of the Company's facilities was issued a notice
of enforcement alleging violations of certain state environmental laws. Based on
its experience and currently available information, management believes that the
resolution of these claims will not have a material adverse effect on the
Company's financial condition, results of operations or cash flows.

         The Company is not contractually committed to any planned capital
expenditures until actual orders are placed for equipment or services. At
December 31, 2002, the Company had no material liabilities for open equipment
and construction orders.

(9)      Summary of Quarterly Financial Data (unaudited)


<Table>
<Caption>
                                                                             2002
                                                ----------------------------------------------------------
                                                MARCH 31,         JUNE 30,   SEPTEMBER 30,    DECEMBER 31,
                                                ----------        --------   -------------    ------------
<S>                                             <C>               <C>        <C>              <C>
              Revenues                          $    8,977        10,961       10,496            8,728
              Gross profit                           1,837         2,981        2,739            1,951

              Net income (loss)                 $     (470)          516          585                5
                                                ==========        ======       ======            =====
              Basic and diluted income (loss)
                   per common share             $    (0.08)         0.09         0.10             0.00
                                                ==========        ======       ======            =====
</Table>


                                    -F 16 -
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                (dollars in thousands, except per share amounts)

         The embezzlements discussed in Note 2 had a material effect on the
previously reported quarterly results. Funds embezzled during 2001 totaling $980
($448 in the three months ended March 31, 2001, $172 in the three months ended
June 30, 2001, $127 in the three months ended September 30, 2001, and $167 in
the three months ended December 31, 2001) were improperly recorded as prepaid
financing costs in other assets, net.

         As a result of the fraudulent entries in other assets, net during 2001
($980 for the all of 2001 and $813 through September 30, 2001), the Company
improperly recorded excess interest expense of $166 for the nine months ended
September 30, 2001 ($45 in the three months ended March 31 2001, $55 in the
three months ended June 30, 2001, and $66 in the three months ended September
30, 2001).

         As a result of the previously unexpensed embezzlement expense, the
Company recorded income tax benefits of $76 in the three months ended March 31,
2001, $22 in the three months ended June 30, 2001, and $24 in the three months
ended September 30, 2001.

         The Company's quarterly financial data for the three months ended March
31, June 30, September 30 and December 31, 2001, were as follows:

<Table>
<Caption>

                                                                     2001
                                                ---------------------------------------------------
                                                MARCH 31,      JUNE 30,  SEPTEMBER 30, DECEMBER 31,
                                                ---------      -------   ------------  -----------
<S>                                             <C>            <C>       <C>           <C>
              Revenues                          $   8,691       10,812      10,975       9,725
              Gross profit                          1,451        3,298       3,312       2,404
              Net income (loss)                 $    (492)         941         772         552
                                                =========      =======      ======       =====
              Basic and diluted income (loss)
                   per common share             $   (0.10)        0.16        0.18        0.09
                                                =========      =======      ======       =====
</Table>


                                    -F 17 -
<PAGE>




ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

                                      NONE


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

         The information appearing under "Election of Directors", "Nominees for
Director" and "Executive Officers Who Are Not Also Directors" in the definitive
Proxy statement for the Company's 2003 Annual Meeting of Shareholders (the "2003
proxy") is hereby incorporated by reference. The Company anticipates that it
will file the 2003 Proxy with the Securities and Exchange Commission on or
before April 2, 2003.

ITEM 11. EXECUTIVE COMPENSATION

         The information appearing under "Executive Compensation" in the 2003
Proxy is hereby incorporated by reference.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

         The information appearing under "Voting Securities and Principal
Shareholders" and "Shareholdings of Company Directors and Executive Officers" in
the 2003 Proxy is hereby incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


                                      NONE

ITEM 14. CONTROLS AND PROCEDURES

         Within 90 days prior to the filing of this report, an evaluation of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures was performed under the supervision and with the participation of
the Company's management, including the Chief Executive Officer ("CEO") and the
Chief Financial Officer ("CFO"). Based on that evaluation, the CEO and CFO
concluded that the Company's disclosure controls and procedures were effective.
There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of the most recent evaluation of internal controls.



                                     - 16 -
<PAGE>
                                    PART IV



ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.


         (a)   1.  The following financial statements are included in Item 8:

                   Report of Independent Auditors

                   Consolidated Financial Statements:

                      Consolidated Balance Sheets as of December, 31, 2002 and
                      2001;

                      Consolidated Statements of Operations for the Years Ended
                      December 31, 2002, 2001 and 2000;

                      Consolidated Statements of Stockholders' Equity for the
                      Years Ended December, 31, 2002, 2001 and 2000;

                      Consolidated Statements of Cash Flows for the Years Ended
                      December 31, 2002, 2001 and 2000; and

                      Notes to Consolidated Financial Statements.

               2.  All financial statement schedules are omitted because they
                   are not applicable, or are immaterial, or the required
                   information is presented in the consolidated financial
                   statements or the related notes.

               3.  The following documents are filed with or incorporated by
                   reference into this Report:

                      3(a)  Articles of Amendment to the Articles of
                            Incorporation of Scottish Heritable, Inc. dated as
                            of January 25, 1994 (incorporated by reference to
                            Exhibit 3(a) to the Company's Annual Report on Form
                            10-K for the fiscal year ended December 31, 1993,
                            File Number 0-4197).

                      3(b)  Restated Articles of Incorporation of the Company
                            dated as of May 14, 1990 (incorporated by reference
                            to Exhibit 3(b) to the Company's Annual Report on
                            Form 10-K for the fiscal year ended December 31,
                            1993, File Number 0-4197).

                      3(c)  Composite Copy of Bylaws of the Company, dated as of
                            December 31, 1991 (incorporated by reference to
                            Exhibit 3(b) to the Company's Annual Report on Form
                            10-K for the fiscal year ended December 31, 1991,
                            File Number 0-4197).

                     10(a)  Third Amendment to the United States Lime &
                            Minerals, Inc. Employee Stock Ownership Plan,
                            effective July 31, 1999 (incorporated by reference
                            to Exhibit 10(a) to the Company's Annual Report on
                            Form 10-K for the fiscal year ended December 31,
                            1999, File Number 0-4197).

                     10(b)  United States Lime & Minerals, Inc. 1992 Stock
                            Option Plan, as Amended and Restated (incorporated
                            by reference to Exhibit 10(c) to the Company's
                            Quarterly Report on Form 10-Q for the quarter ended
                            June 30, 1999, File Number 0-4197).

                     10(c)  United States Lime & Minerals, Inc. 2001 Long-Term
                            Incentive Plan (incorporated by reference to Exhibit
                            B to the Company's definitive Proxy Statement for
                            its Annual Meeting of Shareholder's held on April
                            27, 2001, File Number 0-4197).

                     10(d)  Loan and Security Agreement dated December 30, 1997
                            among United States Lime & Minerals, Inc., Arkansas
                            Lime Company and Texas Lime Company and CoreStates
                            Bank, N.A. (incorporated by reference to Exhibit
                            10(l) to the Company's Annual Report on Form 10-K
                            for the fiscal year ended December 31, 1997, File
                            Number 0-4197).

                                     - 17 -
<PAGE>


                     10(e)  First Amendment to Amended and Restated Loan and
                            Security Agreement dated August 31, 1998 among
                            United States Lime & Minerals, Inc., Arkansas Lime
                            Company and Texas Lime Company and First Union
                            National Bank (incorporated by reference to Exhibit
                            10(a) to the Company's Quarterly Report on Form 10-Q
                            for the quarter ended September, 30, 1998, File
                            Number 0-4197).

                     10(f)  Employment Agreement dated as of October 11, 1989
                            between the Company and Billy R. Hughes
                            (incorporated by reference to Exhibit 10(a) to the
                            Company's Quarterly Report on Form 10-Q for the
                            quarter ended March 31, 1999, File Number 0-4197).

                     10(g)  Employment Agreement dated as of April 17, 1997
                            between the Company and Johnney G. Bowers
                            (incorporated by reference to Exhibit 10(o) to the
                            Company's Annual Report on Form 10-K for the fiscal
                            year ended December 31, 1997, File Number 0-4197).

                     10(h)  Employment Agreement dated as of December 1, 1998
                            between the Company and Herbert G.A. Wilson
                            (incorporated by reference to Exhibit 10(r) to the
                            Company's Annual Report on Form 10-K for the fiscal
                            year ended December 31, 1998, File Number 0-4197).

                     10(i)  Employment Agreement dated as December 8, 2000
                            between the Company and Timothy W. Byrne
                            (incorporated by reference to Exhibit 10(s) to the
                            Company's Annual Report on Form 10-K for the fiscal
                            year ended December 31, 2000, File Number 0-4197).

                     10(j)  Credit Agreement dated April 22, 1999 among United
                            States Lime & Minerals, Inc., Arkansas Lime Company,
                            Texas Lime Company, the Lenders who are, or may
                            become, a party to this Agreement, and First Union
                            National Bank (incorporated by reference to Exhibit
                            10(a) to the Company's Quarterly Report on Form 10-Q
                            for the quarter ended June 30, 1999, File Number
                            0-4197).

                     10(k)  Second Amendment to Amended and Restated Loan and
                            Security Agreement dated as of April 22, 1999 among
                            United States Lime & Minerals, Inc., Arkansas Lime
                            Company, Texas Lime Company, and First Union
                            National Bank (incorporated by reference to Exhibit
                            10(b) to the Company's Quarterly Report on Form 10-Q
                            for the quarter ended June 30, 1999, File Number
                            0-4197).

                     10(l)  Letter Agreement dated as of May 31, 2000 among
                            United States Lime & Minerals, Inc., Arkansas Lime
                            Company, Texas Lime Company and First Union National
                            Bank (incorporated by reference to Exhibit 10 to the
                            Company's Quarterly Report on Form 10-Q for the
                            quarter ended June 30, 2000, File Number 0-4197).

                     10(m)  Third Amendment to Amended and Restated Loan and
                            Security Agreement dated as of April 26, 2001 among
                            United States Lime & Minerals, Inc., Arkansas Lime
                            Company, Texas Lime Company, and First Union
                            National Bank (incorporated by reference to Exhibit
                            10 to the Company's Quarterly Report on Form 10-Q
                            for the quarter ended March 31, 2001, File Number
                            0-4197).

                     10(n)  Fourth Amendment to Amended and Restated Loan and
                            Security Agreement dated as of December 31, 2001
                            among United States Lime & Minerals, Inc., Arkansas
                            Lime Company, Texas Lime Company, and First Union
                            National Bank. (Incorporated by reference to Exhibit
                            10(u) to the Company's Annual Report on Form 10-K
                            for the fiscal year ended December 31, 2001, File
                            Number 0-4197).

                     10(o)  First Amendment to Credit Agreement dated as of
                            December 27, 2000 among United States Lime &
                            Minerals, Inc., Arkansas Lime Company, Texas Lime
                            Company, the Lenders who are, or may become, a party
                            to this Agreement, and First Union National Bank
                            (incorporated by reference to the Company's Current
                            Report on Form 8-K dated January 18, 2001, File
                            Number 0-4197).


                                     - 18 -
<PAGE>

                     10(p)  Subordinated Promissory Note dated as of December
                            27, 2000 among United States Lime & Minerals, Inc.,
                            Texas Lime Company, Arkansas Lime Company, and
                            Inberdon Enterprises Ltd. (incorporated by reference
                            to the Company's Current Report on Form 8-K dated
                            January 18, 2001, File Number 0-4197).

                     10(q)  Seconded Amended and Restated Note dated April 26,
                            2001 among United States Lime & Minerals, Inc.,
                            Arkansas Lime Company, Texas Lime Company, the
                            Lenders who are, or may become, a party to this
                            Agreement, and First Union National Bank.
                            (incorporated by reference to exhibit 10(x) to the
                            Company's Annual Report on Form 10-K for the fiscal
                            year ended December 31, 2001, File Number 0-4197).

                     10(r)  Fifth Amendment to Amended and Restated Loan and
                            Security Agreement dated as of May 31, 2002 among
                            United States Lime & Minerals, Inc., Arkansas Lime
                            Company, Texas Lime Company and Wachovia Bank, FKA
                            First Union National Bank (incorporated by reference
                            to Exhibit 10 to the Company's Quarterly Report on
                            Form 10-Q for the quarter ended June 30, 2002, file
                            number 0-4197).

                     10(s)  Sixth Amendment to Amended and Restated Loan and
                            Security Agreement dated as of January 31, 2003
                            among United States Lime & Minerals, Inc., Arkansas
                            Lime Company, Texas Lime Company and Wachovia Bank.

                     10(t)  Loan and Security Agreement dated March 3, 2003
                            among United States Lime & Minerals, Inc., Texas
                            Lime Company, Arkansas Lime Company and National
                            City Bank.

                     21     Subsidiaries of the Company.

                     23     Consent of Independent Auditors.

                     99(a)  Section 906 Certification by Chief Executive Officer

                     99(b)  Section 906 Certification by Chief financial Officer

----------

         Exhibits 10(a) through 10(c), and 10(f) through 10(i) are management
         contracts or compensatory plans or arrangements required to be filed as
         exhibits.

         (b) The Company did not file any Current Reports on Form 8-K during the
             fourth quarter 2002.



                                     - 19 -
<PAGE>



                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                   UNITED STATES LIME & MINERALS, INC.


Date:  March 27, 2003                  By: /s/ Timothy W. Byrne
                                           -------------------
                                           Timothy W. Byrne, President and
                                           Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


Date: March 27, 2003                   By: /s/ Timothy W. Byrne
                                           ------------------------------------
                                           Timothy W. Byrne, President,
                                           Chief Executive Officer, and
                                           Director (Principal Executive
                                           Officer)

Date:  March 27, 2003                  By: /s/ M. Michael Owens
                                           ------------------------------------
                                           M. Michael Owens, Vice President
                                           and Chief Financial Officer
                                           (Principal Financial and Accounting
                                           Officer)

Date: March 27, 2003                   By: /s/ Edward A. Odishaw
                                           ------------------------------------
                                           Edward A. Odishaw, Director and
                                           Chairman of the Board

Date: March 27, 2003                   By: /s/ Antoine M. Doumet
                                           ------------------------------------
                                           Antoine M. Doumet, Director and
                                           Vice Chairman of the Board

Date: March 27, 2003                   By: /s/ Wallace G. Irmscher
                                           ------------------------------------
                                           Wallace G. Irmscher, Director


Date: March 27, 2003                   By: /s/ Richard W. Cardin
                                           ------------------------------------
                                           Richard W. Cardin, Director


                                     - 20 -
<PAGE>


I, Timothy W. Byrne, certify that:

     1.  I have reviewed this annual report on Form 10-K of United States Lime &
         Minerals, Inc.;

     2.  Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

     3.  Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

     4.  The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a)   designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              annual report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this annual report (the "Evaluation Date"); and

         c)   presented in this annual report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

     5.  The registrant's other certifying officer and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of the registrant's board of directors (or persons
         performing the equivalent function):

         a)   all significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

         b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

     6.  The registrant's other certifying officer and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


         Dated:  March 27, 2003


                                            /s/  Timothy W. Byrne
                                            ----------------------------------
                                            Timothy W. Byrne
                                            Chief Executive Officer



                                     - 21 -
<PAGE>




I, M. Michael Owens, certify that:

     1.  I have reviewed this annual report on Form 10-K of United States Lime &
         Minerals, Inc.;

     2.  Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

     3.  Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

     4.  The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a)   designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              annual report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this annual report (the "Evaluation Date"); and

         c)   presented in this annual report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

     5.  The registrant's other certifying officer and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of the registrant's board of directors (or persons
         performing the equivalent function):

         a)   all significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

         b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

     6.  The registrant's other certifying officer and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.




         Dated:  March 27, 2003
                                                /s/  M. Michael Owens
                                                -------------------------------
                                                M. Michael Owens
                                                Chief Financial Officer




                                     - 22 -
<PAGE>
                                 EXHIBIT INDEX

<Table>
<Caption>

EXHIBIT
NUMBER         DESCRIPTION
-------        -----------
<S>            <C>

   10(s)       Sixth Amendment to Amended and Restated Loan and Security
               Agreement dated as of January 31, 2003 among United States Lime
               & Minerals, Inc., Arkansas Lime Company, Texas Lime Company and
               Wachovia.

   10(t)       Loan and Security Agreement dated March 3, 2003 among United
               States Lime & Minerals, Inc., Texas Lime Company, Arkansas Lime
               Company and National City Bank.

   21          Subsidiaries of the Company.

   23          Consent of Independent Auditors.

   99(a)       Section 906 Certification by the Chief Executive Officer

   99(b)       Section 906 Certification by the Chief Financial Officer
</Table>