-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BzdkJJsQhsjBkX73kvGPppnh6gRfbWfYpxBNgp8alNQr/3QIJq9sFeZkud5AtOz1 7Q9w7sla5dhfw8QzFzpCAQ== 0000067517-95-000009.txt : 19951118 0000067517-95-000009.hdr.sgml : 19951118 ACCESSION NUMBER: 0000067517-95-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951109 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONARCH CEMENT CO CENTRAL INDEX KEY: 0000067517 STANDARD INDUSTRIAL CLASSIFICATION: CONCRETE GYPSUM PLASTER PRODUCTS [3270] IRS NUMBER: 480340590 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-02757 FILM NUMBER: 95588709 BUSINESS ADDRESS: STREET 1: P O BOX 1000 CITY: HUMBOLDT STATE: KS ZIP: 66748 BUSINESS PHONE: 3164732225 10-Q 1 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 September 30, 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 November 4, 1995 , the Registrant had outstanding 2,182,039 shares of Capital Stock, par value $2.50 per share and 2,057,251 shares of Class B Capital Stock, par value $2.50 per share. PART I. FINANCIAL INFORMATION NOTES TO THE SECURITIES AND EXCHANGE COMMISSION REPORT FORM 10-Q FOR THE QUARTER ENDED September 30, 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 third quarter and the first nine months of 1995 and 1994. THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS--SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
ASSETS LIABILITIES AND STOCKHOLDERS' INVESTMENT 1 9 9 5 1 9 9 4 1 9 9 5 1 9 9 4 CURRENT ASSETS: CURRENT LIABILITIES: Cash and cash equivalents, at cost Accounts and notes payable $ 3,639,909 $ 3,826,624 which approximates market $ 4,499,051 $ 3,668,782 Accrued liabilities 3,489,278 2,877,213 Short term investments, at cost Total current liabilities $ 7,129,187 $ 6,703,837 which approximates market 1,875,388 5,358,751 Receivables, less allowances of $466,000 in 1995 and $429,000 in 1994 for doubtful accounts 11,726,616 7,157,102 ACCRUED POSTRETIREMENT BENEFITS 9,591,382 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 531,583 443,658 Finished cement $ 2,010,044 $ 1,348,752 Work in process 408,457 258,465 Building products 1,120,205 974,157 Cost determined by first-in, MINORITY INTEREST IN CONSOLIDATED first-out method- SUBSIDIARIES 1,867,253 1,373,829 Fuel, gypsum, paper sacks and other 1,666,935 1,382,900 Cost determined by average method- Operating and maintenance supplies 5,470,488 4,900,505 STOCKHOLDERS' INVESTMENT: Total inventories $10,676,129 $ 8,864,779 Capital stock, par value $2.50 Refundable federal and state per share-Authorized 10,000,000 income taxes 25,221 1,073,858 shares, Issued 2,181,539 shares Deferred income taxes 370,000 370,000 at 9-30-95 and 2,156,026 shares Prepaid expenses 171,900 29,771 at 12-31-94 $ 5,453,847 $ 5,390,065 Total current assets $29,344,305 $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 2,057,751 shares at 9-30-95 and and depletion of $66,770,647 in 1995 2,083,264 shares at 12-31-94 5,144,378 5,208,160 and $64,459,510 in 1994 23,184,570 20,988,202 Retained Earnings 28,050,967 24,081,613 $38,649,192 $34,679,838 DEFERRED INCOME TAXES 2,193,800 2,420,000 Plus: Unrealized holding gain 451,800 111,800 Less: Excess pension liability 393,214 393,214 OTHER ASSETS 3,104,508 2,590,742 Total stockholders' investment $38,707,778 $34,398,424 $57,827,183 $52,521,987 $57,827,183 $52,521,987
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
For the Three Months Ended For the Nine Months Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 1995 1994 1995 1994 NET SALES $27,049,033 $20,214,042 $59,877,901 $54,238,902 COST OF SALES 19,204,745 15,507,078 46,170,891 42,874,546 Gross profit from operations $ 7,844,288 $ 4,706,964 $13,707,010 $11,364,356 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,821,412 1,728,009 5,059,658 4,893,559 Income from operations 6,022,876 $ 2,978,955 $ 8,647,352 $ 6,470,797 OTHER INCOME (EXPENSE): Interest income $ 79,086 $ 169,666 $ 249,592 $ 371,249 Other, net (238,297) (101,492) (794,946) (37,308) $ (159,211) $ 68,174 $ (545,354) $ 333,941 Income before provision for taxes on income $ 5,863,665 $ 3,047,129 $ 8,101,998 $ 6,804,738 PROVISION FOR TAXES ON INCOME 2,300,000 1,000,000 3,200,000 2,500,000 NET INCOME $ 3,563,665 $ 2,047,129 $ 4,901,998 $ 4,304,738 RETAINED EARNINGS, beg. of period 24,953,624 23,739,804 24,081,613 27,247,630 Less stock dividends - - - 5,299,113 Less cash dividends 466,322 466,322 932,644 932,644 RETAINED EARNINGS, end of period $28,050,967 $25,320,611 $28,050,967 $25,320,611 NET INCOME PER SHARE $.84 $.48 $1.16 $1.02 CASH DIVIDENDS PER SHARE $.11 $.11 $.22 $.22
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended Sept. 30, Sept. 30, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,901,998 $ 4,304,738 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and depletion 2,805,533 2,532,759 Increase in long-term notes receivable (49,687) - Gain on disposal of assets (157,099) (251,657) 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 (4,569,514) (1,412,334) Increase in inventories (1,811,350) (1,403,995) Decrease in refundable federal and state income taxes 1,048,637 - Increase in prepaid expenses (142,129) (179,041) Decrease in accounts payable, notes payable and accrued liabilities 1,357,994 392,025 Increase in deferred income taxes 226,200 - Increase (decrease) in postretirement benefits (10,857) 203,187 Increase (decrease) in accrued pension expense 87,925 (2,839) Minority interest in earnings of subsidiaries 470,169 340,653 Net cash provided by operating activities $ 4,157,820 $ 4,482,155 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant and equipment $(5,051,435) $(5,021,532) Net sales (purchases) of subsidiaries stock 226,573 (554,613) Proceeds from disposals of property, plant and equipment 214,459 280,362 Payment for purchases of other investments, net - (956,413) Proceeds from disposals of other investments - 240,823 (Increase) decrease in other assets (131,905) 2,616 Decrease in short term investments 3,483,363 3,094,638 Net cash used for investing activities $(1,258,945) $(2,914,119) CASH FLOWS FROM FINANCING ACTIVITIES: Cash dividends $(1,865,288) $(1,780,502) Subsidiaries' dividends paid to minority interest (98,118) (55,180) Subsidiaries' purchase of treasury stock (105,200) - Net cash used for financing activities $(2,068,606) $(1,835,682) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 830,269 $ (267,646) CASH AND CASH EQUIVALENTS, beginning of year 3,668,782 1,665,877 CASH AND CASH EQUIVALENTS, end of period $ 4,499,051 $ 1,398,231 Interest paid $4,100 $2,298 Income taxes paid $821,475 $2,947,991
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 nine months of 1995 primarily due to capital expenditures and funding increased receivables and inventories. Results of Operations Adverse weather conditions, which prevailed throughout the registrant's market area during the first six months of 1995, cleared during the third quarter of 1995. As construction projects resumed, sales of cement and ready- mixed concrete increased. By the end of the third quarter of 1995, the registrant's year-to-date net sales surpassed its net sales for the first nine months of 1994 by 10%. Net sales for the third quarter of 1995 alone were 34% greater than 1994 third quarter net sales. These increases in net sales were the result of an increase in the volume of cement sold along with moderate increases in the price of cement and ready-mixed concrete sold. By the beginning of the third quarter of 1995, the modifications to the registrant's two preheater kilns and the installation of the vibrating grizzly were substantially complete. These improvements increased the plant's production capacity and allowed the registrant to eliminate the purchase of cement and to substantially reduce the purchase of clinker from other market areas. These cement and clinker purchases, which began in June and September of 1994, respectively, were at prices above the registrant's production costs and increased per unit cost of sales primarily during the last quarter of 1994 and the first half of 1995. Operating efficiencies achieved through higher sales volumes, reduction of costs associated with producing versus purchasing cement and clinker and a moderate increase in the price of cement and ready-mixed concrete combined to increase gross profit from operations 67% and 21% for the third quarter and first nine months of 1995 as compared to similar periods in 1994. The registrant's gross profit margin during the third quarter of 1995 was 29%, which was 25% higher than its gross profit margin for the third quarter of 1994. 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 or until adverse weather returns. The registrant believes its inventory levels and production capabilities are adequate to fulfill its customers needs. The increase in other expense was primarily due to the settlement of a disputed contract during the first quarter of 1995 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 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. 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 September 30, 1995. (b) There were no reports required to be filed on Form 8-K during the quarter July 1, 1995 to September 30, 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 November 9, 1995 /s/ Jack R. Callahan Jack R. Callahan President Date November 9, 1995 /s/ Lyndell G. Mosley Lyndell G. Mosley, CPA Assistant Secretary-Treasurer (Principal Financial Officer) EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1995 SEP-30-1995 4499051 1875388 12192616 466000 10676129 29344305 89955217 66770647 57827183 7129187 0 10598225 0 0 28109553 57827183 59877901 59877901 46170891 46170891 0 0 0 8101998 3200000 4901998 0 0 0 4901998 1.16 1.16
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