-----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, B/m+6f+nlIpCNvrqOft1SqyFmv1XdrUhCWGOwnfPGgFgEqYp0yZjaw/ofYUSpxwY E0AcfUdpfRJ7jCAOG89xYw== 0000067517-01-500003.txt : 20010516 0000067517-01-500003.hdr.sgml : 20010516 ACCESSION NUMBER: 0000067517-01-500003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010515 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: SEC FILE NUMBER: 000-02757 FILM NUMBER: 1638185 BUSINESS ADDRESS: STREET 1: P O BOX 1000 CITY: HUMBOLDT STATE: KS ZIP: 66748 BUSINESS PHONE: 3164732225 10-Q 1 edg101.txt 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, 2001 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) (620) 473-2222 (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 11, 2001 , the Registrant had outstanding 2,294,741 shares of Capital Stock, par value $2.50 per share and 1,758,187 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, 2001 1. 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, 2000. 3. Basic earnings 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 4,071,575 and 4,126,742 in the first quarter of 2001 and 2000, respectively. 4. The registrant groups its operations into two business segments - Industry Segment A (cement manufacturing) and Industry Segment B (ready- mixed concrete and sundry building materials). Following is condensed information for each segment for the quarters ended March 31, 2001 and 2000: 2001 2000 (In Thousands) Sales to Unaffiliated Customers- Industry: Segment A $ 5,953 $ 7,102 Segment B 14,040 15,287 Intersegment Sales- Industry: Segment A 1,736 1,719 Segment B 4 - Operating Profit- Industry: Segment A 1,114 1,262 Segment B (1,706) 313 Identifiable Assets- Industry: Segment A 61,479 42,148 Segment B 35,642 28,842 5. Certain statements under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this Form 10-Q, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may affect the actual results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others: general economic and business conditions; competition; raw material and other operating costs; costs of capital equipment; changes in business strategy or expansion plans; and demand for the registrant's products. THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2001 AND DECEMBER 31, 2000
ASSETS 2 0 0 1 2 0 0 0 CURRENT ASSETS: Cash and cash equivalents $ 1,704,055 $ 9,451,281 Short-term investments, at cost which approximates market 510,231 2,543,286 Receivables, less allowances of $395,000 in 2001 and $375,000 in 2000 for doubtful accounts 14,096,479 8,430,945 Inventories, priced at cost which is not in excess of market- Cost determined by last-in, first-out method- Finished cement $ 5,821,885 $ 3,675,351 Work in process 6,701,265 4,373,014 Building products 1,266,395 1,250,120 Cost determined by first-in, first-out method- Fuel, gypsum, paper sacks and other 3,699,403 2,268,434 Cost determined by average method- Operating and maintenance supplies 8,525,838 9,458,554 Total inventories $ 26,014,786 $21,025,473 Refundable federal and state income taxes 1,280,000 1,200,000 Deferred income taxes 450,000 415,000 Prepaid expenses 398,451 63,031 Total current assets $ 44,454,002 $43,129,016 PROPERTY, PLANT AND EQUIPMENT, at cost, less accumulated depreciation and depletion of $85,455,961 in 2001 and $83,666,552 in 2000 56,611,534 45,809,748 DEFERRED INCOME TAXES 1,990,000 2,430,000 OTHER ASSETS 5,984,777 4,862,955 $109,040,313 $96,231,719 LIABILITIES AND STOCKHOLDERS' INVESTMENT CURRENT LIABILITIES: Accounts payable $ 8,100,428 $ 5,452,004 Accrued liabilities 3,178,474 4,725,998 Total current liabilities $ 11,278,902 $10,178,002 ACCRUED POSTRETIREMENT BENEFITS 8,437,604 8,397,620 LONG-TERM DEBT 12,195,504 - MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 2,576,711 2,346,663 STOCKHOLDERS' INVESTMENT: Capital stock, par value $2.50 per share- Authorized 10,000,000 shares, Issued 2,291,170 shares at 3/31/2001 and 2,312,547 shares at 12/31/2000 $ 5,727,925 $ 5,781,368 Class B capital stock, par value $2.50 per share-Authorized 10,000,000 shares, Issued 1,766,856 shares at 3/31/2001 and 1,788,349 shares at 12/31/2000 4,417,140 4,470,872 Retained Earnings 63,316,527 64,117,194 Accumulated other comprehensive income 1,090,000 940,000 Total stockholders' investment $ 74,551,592 $75,309,434 $109,040,313 $96,231,719
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS For the Three Months Ended March 31, 2001 and 2000
2001 2000 NET SALES $19,993,638 $22,388,688 COST OF SALES 18,260,536 18,784,452 Gross profit from operations $ 1,733,102 $ 3,604,236 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2,325,457 2,028,883 Income (loss) from operations $ (592,355) $ 1,575,353 OTHER INCOME (EXPENSE): Interest income $ 59,765 $ 249,053 Other, net 296,941 (157,629) $ 356,706 $ 91,424 Income (loss) before taxes on income $ (235,649) $ 1,666,777 PROVISION FOR (BENEFIT FROM) TAXES ON INCOME (80,000) 600,000 NET INCOME (LOSS) $ (155,649) $ 1,066,777 RETAINED EARNINGS, beginning of period 64,117,194 57,308,627 Less purchase and retirement of treasury stock 645,018 141,366 RETAINED EARNINGS, end of period $63,316,527 $58,234,038 Basic earnings (loss) per share $(.04) $.26
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Three Months Ended March 31, 2001 and 2000
2001 ,2000 , NET INCOME (LOSS) $ (155,649) $1,066,777 UNREALIZED APPRECIATION (DEPRECIATION) ON AVAILABLE FOR SALE SECURITIES (Net of deferred tax expense (benefit) of $100,000 and $(10,000) for 2001 and 2000, respectively) 150,000 (20,000) COMPREHENSIVE INCOME (LOSS) $ (5,649) $1,046,777
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2001 and 2000
2001 2000 OPERATING ACTIVITIES: Net income (loss) $ (155,649) $ 1,066,777 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and depletion 1,719,596 1,437,130 Gain on disposal of assets (75,903) (5,574) Change in assets and liabilities: Receivables, net (5,267,272) (4,178,112) Inventories (3,948,766) (3,546,717) Refundable federal and state income taxes (80,000) - Prepaid expenses (289,619) (319,994) Deferred income taxes 100,000 (10,000) Accounts payable, notes payable and accrued liabilities 987,769 822,362 Accrued postretirement benefits 39,984 (48,230) Accrued pension expense (40,338) - Minority interest in earnings of subsidiaries (281,138) 165,432 Net cash used for operating activities $ (7,291,336) $(4,616,926) INVESTING ACTIVITIES: Acquisition of property, plant and equipment $(10,803,383) $(2,941,469) Business acquisition (1,040,400) - Proceeds from disposals of property, plant and equipment 103,610 6,500 Payment for purchases of equity investments (463,177) (519,341) Increase in other assets (97,111) (34,772) Decrease in short-term investments, net 2,041,618 7,879,992 Net cash provided by investing activities $(10,258,843) $ 4,390,910 FINANCING ACTIVITIES: Increase in long-term debt $ 12,195,504 $ - Cash dividends (1,640,358) (1,569,282) Purchase of treasury stock (752,193) (161,968) Net cash used for financing activities $ 9,802,953 $(1,731,250) Net decrease in cash and cash equivalents $ (7,747,226) $(1,957,266) CASH AND CASH EQUIVALENTS, beginning of year 9,451,281 4,782,168 CASH AND CASH EQUIVALENTS, end of period $ 1,704,055 $ 2,824,902 Interest paid $ 55,201 $ - Income taxes paid $ - $103,725
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES 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 2001 primarily due to increases in receivables and inventories and the purchase of equipment. 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. In January 2001, the registrant entered into an unsecured credit commitment with the Bank of Oklahoma N.A. This commitment consists of a $30,000,000 advancing term loan maturing December 31, 2005 and a $5,000,000 line of credit maturing December 31, 2002 with floating interest rates based on Chase Manhattan Bank prime rate less 1.25%. These loans are being utilized to help finance the expansion project currently underway at the registrant's cement manufacturing facility. The registrant believes its internal and external capital resources are adequate to meet its foreseeable capital expenditure requirement and liquidity needs. RESULTS OF OPERATIONS Net sales for the first quarter of 2001 decreased 11% as compared to the first quarter of 2000 primarily due to decreases in volume of cement and ready-mixed concrete sold. Wet, cold weather during the first quarter of 2001 slowed construction projects, decreasing sales of both cement and ready-mixed concrete. In contrast, during the first quarter of 2000, mild, dry weather allowed construction projects to proceed. While net sales decreased 11% for the first quarter of 2001 as compared to the first quarter of 2000, cost of sales decreased only 3% resulting in a 46% decrease in gross profit as a percent of sales. This decrease in gross profit as a percent of sales is primarily due to the decrease in volume sold. 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, 2001. (b) There were no reports required to be filed on Form 8-K during the quarter January 1, 2001 to March 31, 2001, 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, 2001 /s/ Walter H. Wulf, Jr. Walter H. Wulf, Jr. President and Chairman of the Board Date May 14, 2001 /s/ Lyndell G. Mosley Lyndell G. Mosley, CPA Chief Financial Officer and Assistant Secretary-Treasurer -----END PRIVACY-ENHANCED MESSAGE-----