FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-2757
THE MONARCH CEMENT COMPANY
(Exact name of registrant as specified in its charter)
KANSAS 48-0340590
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 1000, HUMBOLDT, KANSAS 66748-1000
(Address of principal executive offices)
(Zip Code)
(316) 473-2225
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
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
As of May 10, 1995 , the Registrant had outstanding 2,173,989 shares
of Capital Stock, par value $2.50 per share and 2,065,301 shares of Class B
Capital Stock, par value $2.50 per share.
<PAGE>
PART I. FINANCIAL INFORMATION
NOTES TO THE SECURITIES AND EXCHANGE COMMISSION
REPORT FORM 10-Q FOR THE QUARTER ENDED
MARCH 31, 1995
l. The condensed financial statements included herein have been prepared by
the registrant, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
registrant believes that the disclosures are adequate to make the
information presented not misleading. The accompanying financial
statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of operations
for the interim periods presented. It is suggested that these condensed
financial statements be read in conjunction with the financial statements
and notes thereto included in the registrant's latest annual report on
Form 10-K.
2. For a summary of accounting policies, the reader should refer to Note 1
of the consolidated financial statements included in the registrant's
annual report on Form 10-K for the fiscal year ended December 31, 1994.
3. The net income per share of capital stock has been calculated based on
the weighted average shares outstanding during each of the reporting
periods after giving retroactive effect to a stock dividend of one share
of Class B capital stock for each share of Capital stock outstanding.
The weighted average number of shares outstanding was 4,239,290 in the
first quarter of 1995 and 1994.
<PAGE>
<TABLE>
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS--MARCH 31, 1995 AND DECEMBER 31, 1994
<CAPTION>
ASSETS LIABILITIES AND STOCKHOLDERS' INVESTMENT
1 9 9 5 1 9 9 4 1 9 9 5 1 9 9 4
<S> <C> <C> <S> <C> <C>
CURRENT ASSETS: CURRENT LIABILITIES:
Cash and cash equivalents, at cost Accounts and notes payable $ 4,132,280 $ 3,826,624
which approximates market $ 2,251,190 $ 3,668,782 Accrued liabilities 1,539,904 2,877,213
Short term investments, at cost Total current liabilities $ 5,672,184 $ 6,703,837
which approximates market 2,356,029 5,358,751
Receivables, less allowances of
$428,000 in 1995 and $429,000 in
1994 for doubtful accounts 7,343,477 7,157,102 ACCRUED POSTRETIREMENT BENEFITS 9,643,878 9,602,239
Inventories, priced at cost which
is not in excess of market-
Cost determined by last-in,
first-out method- ACCRUED PENSION EXPENSE 476,658 443,658
Finished cement $ 3,804,133 $ 1,348,752
Work in process 767,410 258,465
Building products 1,029,723 974,157
Cost determined by first-in, MINORITY INTEREST IN CONSOLIDATED
first-out method- SUBSIDIARIES 1,597,022 1,373,829
Fuel, gypsum, paper sacks
and other 1,358,016 1,382,900
Cost determined by average method-
Operating and maintenance supplies 4,964,481 4,900,505 STOCKHOLDERS' INVESTMENT:
Total inventories $11,923,763 $ 8,864,779 Capital stock, par value $2.50
Refundable federal and state per share-Authorized 10,000,000
income taxes 1,073,858 1,073,858 shares, Issued 2,168,231 shares
Deferred income taxes 370,000 370,000 at 3-31-95 and 2,156,026 shares
Prepaid expenses 128,746 29,771 at 12-31-94 $ 5,420,577 $ 5,390,065
Total current assets $25,447,063 $26,523,043 Class B Capital stock, par value
$2.50 per share-Authorized
PROPERTY, PLANT AND EQUIPMENT, at 10,000,000 shares, Issued
cost, less accumulated depreciation 2,071,059 shares at 3-31-95 and
and depletion of $65,165,531 in 1995 2,083,264 shares at 12-31-94 5,177,648 5,208,160
and $64,459,510 in 1994 21,516,102 20,988,202 Retained Earnings 24,321,360 24,081,613
$34,919,585 $34,679,838
DEFERRED INCOME TAXES 2,315,000 2,420,000 Plus: Unrealized holding gain 267,900 111,800
Less: Excess pension liability 393,214 393,214
OTHER ASSETS 2,905,848 2,590,742 Total stockholders' investment $34,794,271 $34,398,424
$52,184,013 $52,521,987 $52,184,013 $52,521,987
</TABLE>
<PAGE>
<TABLE>
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
<CAPTION>
For the Three Months Ended
March 31, March 31,
1995 1994
<S> <C> <C>
NET SALES $13,448,787 $13,183,155
COST OF SALES 11,076,739 11,288,832
Gross profit from operations $ 2,372,048 $ 1,894,323
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 1,635,867 1,595,562
Income from operations $ 736,181 $ 298,761
OTHER INCOME (EXPENSE):
Interest income $ 92,495 $ 82,403
Other, net (423,929) (15,491)
$ (331,434) $ 66,912
Income before provision
for taxes on income $ 404,747 $ 365,673
PROVISION FOR TAXES ON INCOME 165,000 160,000
NET INCOME (Per share-$.06 in
1995 and $.05 in 1994) $ 239,747 $ 205,673
RETAINED EARNINGS, beginning of period 24,081,613 27,247,630
RETAINED EARNINGS, end of period $24,321,360 $27,453,303
</TABLE>
<PAGE>
<TABLE>
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
For the Three Months Ended
March 31, March 31,
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 239,747 $ 205,673
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and depletion 881,960 807,642
Increase in long-term notes receivable (64,481) -
Loss on disposal of assets 17,519 -
Gain on sale of other investments - (41,341)
Change in current assets and liabilities net
of effects from purchase of subsidiaries:
Increase in receivables, net (186,375) (1,193,089)
Increase in inventories (3,058,984) (1,082,763)
Increase in prepaid expenses (98,975) (149,451)
Decrease in accounts payable, notes
payable and accrued liabilities (99,009) (4,897)
Decrease in deferred income taxes 105,000 -
Increase in postretirement benefits 41,639 2,159
Increase in accrued pension expense 33,000 18,390
Minority interest in earnings
of subsidiaries 67,362 70,432
Net cash used for operating activities $(2,121,597) $(1,367,245)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment $ (1,456,464) $ (790,801)
Net sales (purchases) of subsidiaries stock 226,573 (554,613)
Proceeds from disposals of property, plant
and equipment 31,693 -
Payment for purchases of other investments, net - (222,520)
Proceeds from disposals of other investments - 240,823
(Increase) decrease in other assets (97,133) 1,419
Decrease in short term investments 3,002,722 3,386,923
Net cash provided by investing activities $ 1,707,391 $ 2,061,231
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends $ (932,644) $ (847,858)
Subsidiaries' dividends paid to minority interest (70,742) (21,000)
Net cash used for financing activities $(1,003,386) $ (868,858)
NET DECREASE IN CASH AND CASH EQUIVALENTS $(1,417,592) $ (174,872)
CASH AND CASH EQUIVALENTS, beginning of year 3,668,782 1,665,877
CASH AND CASH EQUIVALENTS, end of period $ 2,251,190 $ 1,491,005
Interest paid $39,270 $11
Income taxes paid $326,203 $799,526
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity
The registrant's ability to generate cash adequate to meet its needs has
been derived primarily from operations. Cash and short term investments
decreased during the first quarter of 1995 primarily due to funding increased
inventories and capital expenditures. The registrant generally produces
additional inventory during this quarter in anticipation of sales volume in
excess of production capabilities during the summer and early fall.
Results of Operations
Demand for cement and ready-mixed concrete in the registrant's market
area has been excellent and is expected to continue at high levels for the
balance of 1995. The registrant experienced a slight decrease in sales volume
and a moderate increase in sales prices during the first quarter of 1995 as
compared to the first quarter of 1994 resulting in insignificant changes in
net sales and cost of sales. The slight decrease in sales volume can be
attributed to adverse weather conditions during the first quarter of 1995.
The increase in other expense was primarily due to the settlement of a
disputed contract requiring the purchase of a specified volume of rock for use
in ready-mixed concrete produced by one of the registrant's subsidiaries.
This conflict was resolved during the first quarter of 1995 with the payment
of $265,000 plus $39,000 interest
Seasonality
The registrant's highest revenue and earnings historically occur in its
second and third fiscal quarters, April through September.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) There are no exhibits required to be filed for the quarter ended
March 31, 1995.
(b) There were no reports required to be filed on Form 8-K during
the quarter January 1, 1995 to March 31, 1995, inclusive, for
which this Form 10-Q is being filed.
S I G N A T U R E S
Pursuant to the requirements 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.
THE MONARCH CEMENT COMPANY
(Registrant)
Date May 12, 1995 /s/ Jack R. Callahan
Jack R. Callahan
President
Date May 12, 1995 /s/ Lyndell G. Mosley
Lyndell G. Mosley, CPA
Assistant Secretary-Treasurer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONARCH
CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE
QUARTER ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE T0
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 2,251,190
<SECURITIES> 2,356,029
<RECEIVABLES> 7,771,477
<ALLOWANCES> 428,000
<INVENTORY> 11,923,763
<CURRENT-ASSETS> 25,447,063
<PP&E> 86,681,633
<DEPRECIATION> 65,165,531
<TOTAL-ASSETS> 52,184,013
<CURRENT-LIABILITIES> 5,672,184
<BONDS> 0
<COMMON> 10,598,225
0
0
<OTHER-SE> 24,196,046
<TOTAL-LIABILITY-AND-EQUITY> 52,184,013
<SALES> 13,448,787
<TOTAL-REVENUES> 13,448,787
<CGS> 11,076,739
<TOTAL-COSTS> 11,076,739
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 404,747
<INCOME-TAX> 165,000
<INCOME-CONTINUING> 239,747
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 239,747
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
