-----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, Ig+m64KZj27mM4eWPnJv/jEG8Qr181ckGuQ/slwX4loM6Ir995NTlQKWzkdMLQww eVwBtcfnOWUkMdw0go5OJQ== 0000067517-97-000007.txt : 19970520 0000067517-97-000007.hdr.sgml : 19970520 ACCESSION NUMBER: 0000067517-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 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: 97607103 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 March 31, 1997 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 14, 1997 , the Registrant had outstanding 2,233,646 shares of Capital Stock, par value $2.50 per share and 1,982,068 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 March 31, 1997 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, 1996. 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. The weighted average number of shares outstanding was 4,216,302 and 4,226,719 in the first three months of 1997 and 1996, respectively. THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS--MARCH 31, 1997 AND DECEMBER 31, 1996
ASSETS LIABILITIES AND STOCKHOLDERS' INVESTMENT 1 9 9 7 1 9 9 6 1 9 9 7 1 9 9 6 CURRENT ASSETS: CURRENT LIABILITIES: Cash and cash equivalents $ 1,771,903 $ 3,242,245 Accounts and notes payable $ 4,873,236 $ 3,454,088 Short term investments, at cost Accrued liabilities 1,769,167 3,228,481 which approximates market 11,672,934 16,103,721 Total current liabilities $ 6,642,403 $ 6,682,569 Receivables, less allowances of $620,000 in 1997 and $616,000 in 1996 for doubtful accounts 9,900,499 8,560,237 ACCRUED POSTRETIREMENT BENEFITS 9,825,558 9,813,569 Inventories, priced at cost which is not in excess of market- Cost determined by last-in, first-out method- ACCRUED PENSION EXPENSE 390,235 390,235 Finished cement $ 3,444,547 $ 1,274,235 Work in process 97,685 174,807 Building products 1,276,094 1,168,402 Cost determined by first-in, MINORITY INTEREST IN CONSOLIDATED first-out method- SUBSIDIARIES 1,836,730 2,181,297 Fuel, gypsum, paper sacks and other 1,453,916 1,481,926 Cost determined by average method- Operating and maintenance supplies 6,528,755 6,625,714 STOCKHOLDERS' INVESTMENT: Total inventories $12,800,997 $10,725,084 Capital stock, par value $2.50 Refundable federal and state per share-Authorized 10,000,000 income taxes 535,733 310,733 shares, Issued 2,229,011 shares Deferred income taxes 450,000 450,000 at 3-31-97 and 2,230,936 shares Prepaid expenses 224,989 25,442 at 12-31-96 $ 5,572,527 $ 5,577,340 Total current assets $37,357,055 $39,417,462 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 1,986,703 shares at 3-31-97 and and depletion of $72,074,539 in 1997 1,995,354 shares at 12-31-96 4,966,758 4,988,385 and $71,678,195 in 1996 24,979,669 23,599,377 Retained Earnings 37,515,291 38,039,014 $48,054,576 $48,604,739 DEFERRED INCOME TAXES 2,090,000 2,350,000 Plus: Unrealized holding gain 1,017,000 976,000 OTHER ASSETS 3,339,778 3,281,570 Total stockholders' investment $49,071,576 $49,580,739 $67,766,502 $68,648,409 $67,766,502 $68,648,409
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
For the Three Months Ended March 31, March 31, 1997 1996 NET SALES $15,890,007 $13,644,086 COST OF SALES 14,951,282 11,276,243 Gross profit from operations $ 938,725 $ 2,367,843 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,698,241 1,709,951 Income (loss) from operations $ (759,516) $ 657,892 OTHER INCOME (EXPENSE): Interest income $ 184,318 $ 130,923 Other, net (46,613) (31,853) $ 137,705 $ 99,070 Income (loss) before provision for taxes on income $ (621,811) $ 756,962 PROVISION FOR (BENEFIT FROM) TAXES ON INCOME (225,000) 275,000 NET INCOME (LOSS) (Per share-$(.09) in 1997 and $.11 in 1996) $ (396,811) $ 481,962 RETAINED EARNINGS, beg. of period 38,039,014 29,806,550 Less purchase and retirement of treasury stock 126,912 117,004 RETAINED EARNINGS, end of period $37,515,291 $30,171,508
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, March 31, 1997 1996 OPERATING ACTIVITIES: Net income $ (396,811) $ 481,962 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and depletion 1,105,419 1,029,532 Gain on disposal of assets (438,254) (4,217) Change in assets and liabilities, net of effects from purchase of subsidiaries: Receivables, net (1,340,262) 480,536 Inventories (2,075,913) (2,734,335) Decrease in refundable federal and state income taxes (225,000) - Prepaid expenses (199,547) (176,766) Deferred income taxes, long-term 260,000 60,000 Long-term notes receivable 6,206 7,397 Accounts payable, notes payable and accrued liabilities 1,141,714 (201,455) Accrued postretirement benefits 11,989 (19,184) Accrued pension expense - (33,923) Minority interest in earnings of subsidiaries 102,179 61,924 Net cash used for operating activities $(2,048,280) $(1,048,529) INVESTING ACTIVITIES: Acquisition of property, plant and equipment $(1,973,103) $(1,482,256) Net purchases and sales of subsidiaries' stock (1,029,410) - Proceeds from disposals of property, plant and equipment 509,896 11,455 Increase in other assets (25,000) (63,559) Decrease in short term investments, net 4,430,787 1,467,575 Net cash provided by (used for) investing activities $ 1,913,170 $ (66,785) FINANCING ACTIVITIES: Cash dividends $(1,181,880) $(1,015,869) Subsidiaries' dividends paid to minority interest - (29,266) Purchase of treasury stock (153,352) (149,504) Net cash used for financing activities $(1,335,232) $(1,194,639) NET DECREASE IN CASH AND CASH EQUIVALENTS $(1,470,342) $(2,309,953) CASH AND CASH EQUIVALENTS, beginning of year 3,242,245 5,071,268 CASH AND CASH EQUIVALENTS, end of period $ 1,771,903 $ 2,761,315 Interest paid $62 $3,746 Income taxes paid $111,289 $485,656
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 and the maturity of short term investments. Cash and short term investments decreased during the first quarter of 1997 primarily due to funding increased inventories, maintenance 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 Net sales for the first quarter of 1997 increased 16% as compared to the first quarter of 1996 as a result of increases in the volume of cement and ready-mixed concrete sold. Demand for cement and ready-mixed concrete in the registrant's market area was excellent during both the first quarter of 1997 and the first quarter of 1996 and is expected to continue during the balance of 1997. Although tons of cement sold during the first quarter of 1997 increased 7% as compared to the first quarter of 1996, cement production exceeded sales thereby increasing the level of cement inventory. The registrant also continued to purchase cement from other market areas to supplement its production capabilities. The 32% increase in cost of sales is the result of a significant increase in maintenance costs during the first quarter of 1997 as compared to the first quarter of 1996. Cement plants require a large capital investment in machinery and equipment. In order to minimize the amount of lost production and to avoid production downtime during the prime shipping season, the registrant periodically shuts down these major pieces of equipment for maintenance. During the first quarter of 1997, the registrant performed significant preventative maintenance on each of its three cement kilns, as well as other major pieces of equipment. This maintenance was substantially completed by the end of the first quarter which should allow the registrant to maximize production and reduce cost of sales as a percent of net sales during the remainder of 1997. 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 March 31, 1997. (b) There were no reports required to be filed on Form 8-K during the quarter January 1, 1997 to March 31, 1997, 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 14, 1997 /s/ Jack R. Callahan Jack R. Callahan President Date May 14, 1997 /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 MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1997 MAR-31-1997 1771903 11672934 10520499 620000 12800997 37357055 97054208 72074539 67766502 6642403 0 0 0 10539285 38532291 67766502 15890007 15890007 14951282 14951282 0 0 0 (621811) (225000) (396811) 0 0 0 (396811) (.09) (.09)
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