-----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, BxFLBB0oIsVKJGh7EBSrqMIs3iQdhQ/HT9618nF1OoD+LiAf8Ibpkyvj1dvAz8Tc B31jU/DQW27Q3MXhQNW2kw== 0000067517-03-000015.txt : 20030814 0000067517-03-000015.hdr.sgml : 20030814 20030814154240 ACCESSION NUMBER: 0000067517-03-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030814 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: 03847403 BUSINESS ADDRESS: STREET 1: P O BOX 1000 CITY: HUMBOLDT STATE: KS ZIP: 66748 BUSINESS PHONE: 6204732225 10-Q 1 edg203.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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 June 30, 2003, 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 66748-0900 (address of principal executive offices) (zip code) Registrant's telephone number, including area code: (620) 473-2222 (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 [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X} As of August 7, 2003, there were 2,374,151 shares of Capital Stock, par value $2.50 per share outstanding and 1,652,807 shares of Class B Capital Stock, par value $2.50 per share outstanding. PART I - FINANCIAL INFORMATION The condensed consolidated financial statements included in this report have been prepared by our Company without audit. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Our Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results of operations for the interim periods presented. Those adjustments consist only of normal, recurring adjustments. The condensed consolidated balance sheet of the Company as of December 31, 2002 has been derived from the audited consolidated balance sheet of the Company as of that date. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Company's most recent annual report on Form 10-K for 2002 filed with the Securities & Exchange Commission. The results of operations for the period are not necessarily indicative of the results to be expected for the full year. Item 1. Financial Statements THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 2003 and December 31, 2002
ASSETS 2 0 0 3 2 0 0 2 (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 2,857,470 $ 3,909,215 Receivables, less allowances of $692,000 in 2003 and $644,000 in 2002 for doubtful accounts 15,203,229 15,916,614 Inventories, priced at cost which is not in excess of market- Cost determined by last-in, first-out method- Finished cement $ 5,374,579 $ 1,386,348 Work in process 1,454,706 626,130 Building products 1,290,838 1,119,723 Cost determined by first-in, first-out method- Fuel, gypsum, paper sacks and other 5,005,416 4,164,573 Cost determined by average method- Operating and maintenance supplies 7,862,561 8,059,488 Total inventories $ 20,988,100 $ 15,356,262 Refundable federal and state income taxes 358,863 562,496 Deferred income taxes 593,000 593,000 Prepaid expenses 964,413 82,304 Total current assets $ 40,965,075 $ 36,419,891 PROPERTY, PLANT AND EQUIPMENT, at cost, less accumulated depreciation and depletion of $100,992,272 in 2003 and $96,128,254 in 2002 80,202,480 82,331,077 DEFERRED INCOME TAXES 3,752,585 4,038,000 OTHER ASSETS 11,138,731 10,717,296 $136,058,871 $133,506,264 LIABILITIES AND STOCKHOLDERS' INVESTMENT CURRENT LIABILITIES: Accounts payable $ 5,767,792 $ 5,845,901 Bank loan payable 8,933,614 3,048,076 Current portion of advancing term loan 3,302,939 3,255,476 Accrued liabilities 3,367,730 5,011,856 Total current liabilities $ 21,372,075 $ 17,161,309 LONG-TERM DEBT 21,515,091 23,284,663 ACCRUED POSTRETIREMENT BENEFITS 9,459,544 9,322,377 ACCRUED PENSION EXPENSE 2,604,898 2,418,375 MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 1,663,010 1,969,101 STOCKHOLDERS' INVESTMENT: Capital stock, par value $2.50 per share, 1 vote per share - Authorized 10,000,000 shares, Issued 2,373,311 shares at 6/30/2003 and 2,344,293 shares at 12/31/2002 $ 5,933,278 $ 5,860,733 Class B capital stock, par value $2.50 per share, supervoting rights of ten votes per share, restricted transferability, convertible at all times into Capital Stock on a share-for-share basis - Authorized 10,000,000 shares, Issued 1,653,647 shares at 6/30/2003 and 1,682,665 shares at 12/31/2002 4,134,117 4,206,662 Retained earnings 70,250,858 70,582,044 Accumulated other comprehensive loss (874,000) (1,299,000) Total stockholders' investment $ 79,444,253 $ 79,350,439 $136,058,871 $133,506,264 See notes to condensed consolidated financial statements
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS For the Three Months and the Six Months Ended June 30, 2003 and 2002 (Unaudited)
For the Three Months Ended For the Six Months Ended June 30, June 30, June 30, June 30, 2003 2002 2003 2002 NET SALES $29,593,928 $35,409,167 $48,563,380 $58,280,820 COST OF SALES 24,796,498 29,393,731 42,760,364 50,595,055 Gross profit from operations $ 4,797,430 $ 6,015,436 $ 5,803,016 $ 7,685,765 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2,943,906 2,727,339 5,827,183 5,313,007 Income (loss) from operations 1,853,524 $ 3,288,097 $ (24,167) $ 2,372,758 OTHER INCOME (EXPENSE): Interest income $ 120,122 $ 85,599 $ 177,104 $ 126,693 Interest expense (276,339) (293,626) (530,321) (466,141) Other, net 815,457 (6,993) 1,051,590 (95,841) $ 659,240 $ (215,020) $ 698,373 $ (435,289) Income before taxes on income $ 2,512,764 $ 3,073,077 $ 674,206 $ 1,937,469 PROVISION FOR TAXES ON INCOME 775,000 920,000 200,000 585,000 NET INCOME $ 1,737,764 $ 2,153,077 $ 474,206 $ 1,352,469 RETAINED EARNINGS, beg. of period 69,318,486 67,099,518 70,582,044 67,900,126 Less cash dividends 805,392 805,392 805,392 805,392 RETAINED EARNINGS, end of period $70,250,858 $68,447,203 $70,250,858 $68,447,203 Basic earnings per share $.43 $.53 $.12 $.34 Cash dividends per share $.20 $.20 $.20 $.20
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Three Months and the Six Months Ended June 30, 2003 and 2002 (Unaudited)
For the Three Months Ended For the Six Months Ended June 30, June 30, June 30, June 30, 2003 2002 2003 2002 NET INCOME $ 1,737,764 $ 2,153,077 $ 474,206 $ 1,352,469 UNREALIZED APPRECIATION (DEPRECIATION) ON AVAILABLE FOR SALE SECURITIES (Net of deferred tax expense (benefit) of $320,000, $(145,000), $280,000 and $50,000, respectively) 480,000 (220,000) 420,000 70,000 COMPREHENSIVE INCOME $ 2,217,764 $ 1,933,077 $ 894,206 $ 1,422,469 See notes to condensed consolidated financial statements
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 2003 and 2002 (Unaudited)
2003 2002 OPERATING ACTIVITIES: Net income $ 474,206 $ 1,352,469 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and depletion 5,406,531 5,286,726 Minority interest in earnings (losses) of subsidiaries (306,091) 6,042 Deferred income taxes 415 - Gain on disposal of assets (320,235) (57,273) Realized gain on sale of other investments (393,393) - Change in assets and liabilities: Receivables, net 712,849 (5,054,757) Inventories (5,631,838) (1,662,703) Refundable federal and state income taxes 203,633 474,867 Prepaid expenses (882,109) (295,836) Other assets 7,636 7,231 Accounts payable and accrued liabilities (111,452) (137,994) Accrued postretirement benefits 137,167 156,372 Accrued pension expense 186,523 (79,903) Net cash used for operating activities $ (516,158) $ (4,759) INVESTING ACTIVITIES: Acquisition of property, plant and equipment $ (3,164,542) $ (4,952,117) Proceeds from disposals of property, plant and equipment 367,961 83,462 Payment for purchases of equity investments (132,493) (486,512) Proceeds from disposals of equity investments 645,697 - Decrease in short-term investments, net 536 162,555 Net purchases of subsidiaries' stock - (529,731) Net cash used for investing activities $ (2,282,841) $ (5,722,343) FINANCING ACTIVITIES: Proceeds from bank loans $ 4,163,429 $ 7,219,909 Cash dividends paid (2,416,175) (2,416,175) Subsidiaries' dividends paid to minority interest - (14,742) Net cash provided by financing activities $ 1,747,254 $ 4,788,992 Net decrease in cash and cash equivalents $ (1,051,745) $ (938,110) CASH AND CASH EQUIVALENTS, beginning of year 3,909,215 3,224,861 CASH AND CASH EQUIVALENTS, end of period $ 2,857,470 $ 2,286,751 Interest paid $564,005 $474,113 Income tax paid, net of refunds $ (3,643) $331,407 See notes to condensed consolidated financial statements
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2003 and 2002 (Unaudited), and December 31, 2002 1. For a summary of accounting policies, the reader should refer to Note 1 of the consolidated financial statements included in our Company's most recent annual report on Form 10-K. 2. 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 4,026,958 in the second quarter of 2003 and 2002 and in the first six months of 2003 and 2002. The Company has no common stock equivalents and therefore, does not report diluted earnings per share. 3. Our Company 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 periods ended June 30, 2003 and 2002 and December 31, 2002 (in thousands):
Three Months Ended Six Months Ended 6/30/03 6/30/02 6/30/03 6/30/02 Sales to Unaffiliated Customers- Industry: Segment A $10,568 $14,661 $16,821 $21,840 Segment B 19,026 20,748 31,742 36,441 Intersegment Sales- Industry: Segment A 3,025 2,892 4,869 5,172 Segment B - 36 - 36 Operating Profit- Industry: Segment A 2,207 2,187 1,931 2,068 Segment B (353) 1,101 (1,955) 305 Capital Expenditures- Industry: Segment A 342 677 611 1,476 Segment B 1,297 2,086 2,554 3,476 Balance as of 6/30/02 12/31/02 Identifiable Assets- Industry: Segment A $80,573 $76,369 Segment B 36,785 37,316 Corporate Assets- 18,701 19,821
4. The Company records revenue from the sale of cement, ready-mixed concrete and sundry building materials when the products are delivered to the customer. Long-term construction contract revenues are recognized on the percentage-of-completion method based on the costs incurred relative to total estimated costs. Full provision is made for any anticipated losses. Billings for long-term construction contracts are rendered monthly, including the amount of retainage withheld by the customer until contract completion. Retainages are included in accounts receivable and are generally due within one year. 5. Capital expenditures for property, plant and equipment were approximately $3,165,000 during the first six months of 2003. These funds were primarily used to upgrade equipment in the ready-mixed concrete and sundry building materials segment. THE MONARCH CEMENT COMPANY AND SUBSIDIARIES Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS Certain statements under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this Form 10-Q report filed with the Securities and Exchange Commission, constitute "forward-looking statements". Except for historical information, the statements made in this report are forward-looking statements that involve risks and uncertainties. You can identify these statements by forward-looking words such as "should", "expect", "anticipate", "believe", "intend", "may", "hope", "forecast" or similar words. In particular, statements with respect to variations in future demand for our products in our market area, the timing, scope, cost and benefits of our proposed and recently completed capital improvements and expansion plans, including the resulting increase in production capacity, our forecasted cement sales, the timing and source of funds for the repayment of our line of credit, and our anticipated increase in solid fuels and electricity required to operate our facilities and equipment are all forward-looking statements. You should be aware that 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; * demand for our Company's products; * cyclical and seasonal nature of our business; * the affect weather has on our business; * the affect of environmental and other government regulation; and * the affect of federal and state funding on demand for our products. LIQUIDITY We are able to meet our cash needs primarily from a combination of operations and bank loans. Cash decreased during the first six months of 2003 primarily due to the purchase of equipment, the increase in inventories and the payment of dividends. In December 2002, Monarch renegotiated its unsecured credit commitment with a bank. This revised commitment consists of a $25,000,000 advancing term loan maturing December 31, 2005 and a $10,000,000 line of credit maturing December 31, 2003. These loans each bear floating interest rates based on JP Morgan Chase prime rate less 1.25% and .75%, respectively. The loan agreement contains a financial covenant related to net worth which the Company was in compliance with at the end of the first six months of 2003. As of June 30, 2003, we had borrowed $24,388,569 on the advancing term loan and $8,933,614 on the line of credit leaving a balance available on the line of credit of $1,066,386. The average daily interest rate we paid on the advancing term loan during the second quarter of 2003 and 2002 was 3.0% and 3.5%, respectively, and for the first six months of 2003 and 2002 was 3.0% and 3.5%, respectively. The average daily interest rate we paid on the line of credit during the second quarter of 2003 and 2002 and the first six months of 2003 and 2002 was 3.5%. As of June 30, 2003, the applicable interest rate was 3.0% on the advancing term loan and 3.5% on the line of credit. We have used these loans to help finance the expansion project at our cement manufacturing facility. We anticipate that the line of credit maturing December 31, 2003 will be paid using funds from operations or replacement bank financing. Our board of directors has given management the authority to borrow an additional $15,000,000 for a maximum of $50,000,000. At this time we do not anticipate borrowing the additional $15,000,000; although an increase in financing may be required on a short-term basis. FINANCIAL CONDITION Total assets as of June 30, 2003 were $136,058,871, an increase of $2,552,607 since December 31, 2002. Decreases in cash and net property, plant and equipment were offset by an increase in inventories, resulting in an increase in total assets. These variations are common during the first six months of the year due to the seasonality of our business (see Seasonality below). Indebtedness increased $4,163,429 during the first six months of 2003 due primarily to increasing inventories and capital expenditures. Stockholders' investment increased .1% during the first six months of 2003 primarily due to the net income. Basic earnings were $.12 per share. CAPITAL RESOURCES The Company regularly invests in miscellaneous equipment and facility improvements in both the cement and ready-mixed concrete segments. Capital expenditures during the first six months of 2003 were primarily routine equipment purchases in the ready-mixed concrete segment. For the balance of the year, we anticipate continuing these recurring capital expenditures in order to keep our equipment and facilities up-to-date. We are also studying the potential fuel savings to be gained through the installation of a coal firing system on our precalciner kiln. This would allow us to burn primarily coal and petroleum coke in our precalciner in lieu of natural gas. We have purchased the equipment for this project; however, we do not anticipate major expenditures towards its installation until 2004. Finally, we continue to monitor projected market demands as we evaluate the feasibility of installing a second precalciner and clinker cooler to further increase our production capacity. Additional bank financing may be required if we elect to proceed with these projects. Results of Operations Cement, ready-mixed concrete and sundry building materials are used in residential, commercial and governmental construction. Overall demand for our products by each of these segments has been strong for the past several years. For the year 2003, the Portland Cement Association (PCA) predicts only a modest decline in the total U.S. consumption of cement. Residential construction, although not as strong as 2002, is still predicted to remain strong due to continued projected low interest rates. Major construction projects, including parking garages, schools, hospitals, waste water treatment plants, and detention facilities are currently underway in our market area. The Kansas highway program is currently on target through 2003, although the Kansas legislature has voted to divert money from future highway projects to other areas due to serious budget shortfalls. Even though the PCA predicts a decline in overall construction spending for the third consecutive year, 2003 is projected to rank as the fourth best year in history for construction spending. Consolidated net sales for the quarter ended June 30, 2003, decreased by $5,815,239 when compared to the quarter ended June 30, 2002. Sales of cement were lower by $4,092,928, and sales of ready-mixed concrete and sundry building materials were lower by $1,722,311. Durign the second quarter of 2003, wet weather slowed construction projects, decreasing sales of both cement and ready-mixed concrete. In contrast, mild, dry weather in our market area during the second quarter of 2002 allowed construction projects to proceed. The gross profit rate for the three months ended June 30, 2003 was 16.2% versus 17.0% for the three months ended June 30, 2002. Selling, general, and administrative expenses increased by 7.9% during the second quarter of 2003 compared to the second quarter of 2002. Overall increases in insurance and payroll costs contributed to this increase, although no single factor increased materially. Other, net increased $822,450 during the second quarter of 2003 as compared to the second quarter of 2002 primarily due to subsidiary losses allocated to minority interest, a gain on the sale of equity investments and an increase in miscellaneous sales. The effective tax rates for the second quarter of 2003 and 2002 were 30.8% and 29.9%, respectively. The Company's effective tax rate differs from the federal and state statutory income tax rate primarily due to the effects of percentage depletion and minority interest in consolidated income. Consolidated net sales for the six months ended June 30, 2003 were $48,563,380, a decrease of $9,717,440 as compared to the six months ended June 30, 2002. Sales of cement were lower by $5,018,566 and sales of ready- mixed concrete and sundry building materials were lower by $4,698,874. During the first six months of 2003, wet weather slowed construction projects, decreasing sales of both cement and ready-mixed concrete. In contrast, mild, dry weather in our market area during the first six months of 2002 allowed construction projects to proceed The gross profit rate for the six months ended June 30, 2003 was 11.9% versus 13.2% for the six months ended June 30, 2002. This decrease is primarily due to reduced utilization of equipment due to lower sales volumes of ready-mixed concrete. Selling, general, and administrative expenses increased 9.7% for the first six months of 2003 compared to the first six months of 2002. Overall increases in insurance and payroll costs contributed to this increase, although no single factor increased materially. Interest expense increased $64,180 for the first half of 2003 as compared to the first half of 2002. Bank loans outstanding as of the beginning of 2003, were greater than the amount outstanding at the beginning of 2002 creating an increase in average bank loans outstanding for the first six months of 2003 as compared to the first six months of 2002. Other, net increased $1,147,431 during the first six months of 2003 as compared to the first six months of 2002 primarily due to an increase in subsidiary losses allocated to minority interest, a gain on the sale of equity investments and an increase in miscellaneous sales. The effective tax rates for the six months ended June 30, 2003 and 2002 were 29.7% and 30.2%, respectively. The Company's effective tax rate differs from the federal and state statutory income tax rate primarily due to the effects of percentage depletion and minority interest in consolidated income. MARKET RISK Market risks relating to the Company's operations result primarily from changes in demand for our products. A significant increase in interest rates could lead to a reduction in construction activities in both the residential and commercial markets. Budget shortfalls during economic slowdowns could cause money to be diverted away from highway projects, schools, detention facilities and other governmental construction projects. Reduction in construction activity lowers the demand for cement, ready-mixed concrete and sundry building materials. As demand decreases, competition to retain sales volume could create downward pressure on sales prices. The manufacture of cement requires a significant investment in property, plant and equipment and a trained workforce to operate and maintain this equipment. These costs do not materially vary with the level of production. As a result, by operating at or near capacity, regardless of demand, companies can reduce per unit production costs. The continual need to control production costs encourages overproduction during periods of reduced demand. INFLATION Inflation directly affects the Company's operating costs. The manufacture of cement requires the use of a significant amount of energy. The Company burns primarily solid fuels, such as coal and petroleum coke, in its preheater kiln. We do not anticipate a significant increase above the rate of inflation in the cost of these solid fuels, or in the electricity required to operate our cement manufacturing equipment. In 2001, the Company added a precalciner to one of its kilns to increase production capacity. This precalciner burns natural gas. Increases in natural gas prices exceeding the rate of inflation create an above average increase in manufacturing costs. The Company has plans to add a coal firing system to its precalciner kiln to reduce dependence on natural gas. Prices of the specialized replacement parts and equipment the Company must continually purchase tend to increase directly with the rate of inflation causing manufacturing costs to increase. SEASONALITY Portland cement is the basic material used in the production of ready- mixed concrete that is used in highway, bridge and building construction. These construction activities are seasonal in nature. During winter months when the ground is frozen, groundwork preparation cannot be completed. Cold temperatures affect concrete set-time, strength and durability, limiting its use in winter months. Dry ground conditions are also required for construction activities to proceed. During the summer, winds and warmer temperatures tend to dry the ground quicker creating fewer delays in construction projects. Variations in weather conditions from year-to-year significantly affect the demand for our products during any particular quarter; however, our Company's highest revenue and earnings historically occur in its second and third fiscal quarters, April through September. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company has $9,125,000 of equity securities as of June 30, 2003. These investments are not hedged and are exposed to the risk of changing market prices. The Company classifies these securities as "available-for- sale" for accounting purposes and marks them to market on the balance sheet at the end of each period. Management estimates that its investments will generally be consistent with trends and movements of the overall stock market excluding any unusual situations. An immediate 10% change in the market price of our equity securities would have a $550,000 effect on comprehensive income. The Company also has $32,322,183 of bank loans as of June 30, 2003. Interest rates on the Company's advancing term loan and line of credit are variable and are based on the JP Morgan Chase prime rate less 1.25% and .75%, respectively. ITEM 4. CONTROLS AND PROCEDURES/INTERNAL CONTROLS As of the end of the quarter ended June 30, 2003, our management, including our President and Chairman of the Board of Directors and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934. Based upon that evaluation, our President and Chairman of the Board of Directors and Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the objectives of our disclosure controls and procedures are satisfied. There has been no change in our internal control over financial reporting during the quarter ended June 30, 2003 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders At the annual meeting of the stockholders of The Monarch Cement Company held on April 9, 2003, the stockholders elected four Class II Directors, namely, Byron J. Radcliff, Michael R. Wachter, Walter H. Wulf, Jr., and Walter H. Wulf, III to serve terms expiring at the annual meeting of stockholders in 2006. Class I Directors, namely, David L. Deffner, Gayle C. McMillen, and Richard N. Nixon and Class III Directors, namely, Jack R. Callahan, Ronald E. Callaway, Robert M. Kissick and Byron K. Radcliff, continue to serve terms expiring at the annual meetings of stockholders in 2005 and 2004, respectively. The following is a summary of votes cast.
Withhold Abstentions/ Authority/ Broker For Against Non-votes Byron J. Radcliff 15,892,637 31,501 N/A Michael R. Wachter 15,892,637 31,501 N/A Walter H. Wulf, Jr. 15,892,637 31,501 N/A Walter H. Wulf, III 15,892,637 31,501 N/A
Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. 31.1 Certificate of the President and Chairman of the Board pursuant to Section 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. 31.2 Certificate of the Chief Financial Officer pursuant to Section 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. 32.1 Certificate of the President and Chairman of the Board pursuant to 18 U.S.C. Section 1350 as adopted under Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certificate of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted under Section 906 of the Sarbanes-Oxley Act of 2002 (b) Reports on Form 8-K. There ware no reports required to be filed on Form 8-K during the quarter for which this report is being filed (April 1, 2003 to June 30, 2003, inclusive). 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 August 14, 2003 /s/ Walter H. Wulf, Jr. Walter H. Wulf, Jr. President and Chairman of the Board Date August 14, 2003 /s/ Debra P. Roe Debra P. Roe, CPA Chief Financial Officer and Assistant Secretary-Treasurer EXHIBIT INDEX Exhibit Number Description 31.1 Certificate of the President and Chairman of the Board pursuant to Section 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 31.2 Certificate of the Chief Financial Officer pursuant to Section 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 32.1 18 U.S.C. Section 1350 Certificate of the President and Chairman of the Board dated August 14, 2003, which is accompanying this Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2003 and is treated as furnished rather than filed in reliance on the final rule issued by the Securities and Exchange Commission Release No. 33-8238. 32.2 18 U.S.C. Section 1350 Certificate of the Chief Financial Officer dated August 14, 2003, which is accompanying this Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2003 and is treated as furnished rather than filed in reliance on the final rule issued by the Securities and Exchange Commission Release No. 33-8238. EX-31 3 edgexh311.txt Exhibit 31.1 302 CERTIFICATIONS I, Walter H. Wulf, Jr., certify that: 1. I have reviewed this quarterly report on Form 10-Q of The Monarch Cement Company; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e)and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial information. Date: August 14, 2003 /s/ Walter H. Wulf, Jr. Walter H. Wulf, Jr. President and Chairman of the Board EX-31 4 edgexh312.txt Exhibit 31.2 302 CERTIFICATIONS I, Debra P. Roe, certify that: 1. I have reviewed this quarterly report on Form 10-Q of The Monarch Cement Company; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e)and 15d-15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial information. Date: August 14, 2003 /s/ Debra P. Roe, CPA Debra P. Roe Chief Financial Officer and Assistant Secretary-Treasurer EX-32 5 edgexh321.txt Exhibit 32.1 18 U.S.C. Section 1350 Certification of the President and Chairman of the Board In connection with the Quarterly Report of The Monarch Cement Company (the "Company"), on Form 10-Q for the quarterly period ending June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (a) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. A signed original of this written statement required by Section 906 has been provided to The Monarch Cement Company and will be retained by The Monarch Cement Company and furnished to the Securities and Exchange Commission or its staff upon request. Dated: August 14, 2003. /s/ Walter H. Wulf, Jr. Walter H. Wulf, Jr. President and Chairman of the Board EX-32 6 edgexh322.txt Exhibit 32.2 18 U.S.C. Section 1350 Certification of the Chief Financial Officer In connection with the Quarterly Report of The Monarch Cement Company (the "Company"), on Form 10-Q for the quarterly period ending June 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (a) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. A signed original of this written statement required by Section 906 has been provided to The Monarch Cement Company and will be retained by The Monarch Cement Company and furnished to the Securities and Exchange Commission or its staff upon request. Dated: August 14, 2003. /s/ Debra P. Roe Debra P. Roe, CPA Chief Financial Officer and Assistant Secretary-Treasurer -----END PRIVACY-ENHANCED MESSAGE-----