THE MONARCH CEMENT COMPANY
(Exact name of registrant as specified in its charter)
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KANSAS
(state or other jurisdiction of incorporation or organization)
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48-0340590
(IRS employer identification no.)
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P.O. BOX 1000, HUMBOLDT, KANSAS
(address of principal executive offices)
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66748-0900
(zip code)
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Large accelerated filer
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___
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Accelerated filer |
X
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Non-accelerated filer |
___
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(Do not check if a smaller reporting company) | Smaller reporting company |
___
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THE MONARCH CEMENT COMPANY AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
June 30, 2011 and December 31, 2010 | ||||||||
ASSETS
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2011
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2010
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||||||
CURRENT ASSETS:
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(Unaudited)
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|||||||
Cash and cash equivalents
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$ | 1,197,597 | $ | 2,695,267 | ||||
Short-term investments, at cost which approximates fair value
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10,166 | - | ||||||
Receivables, less allowances of $650,813 in 2011 and
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||||||||
$707,000 in 2010 for doubtful accounts
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15,674,406 | 12,016,919 | ||||||
Inventories, priced at cost which is not in excess of market-
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||||||||
Finished cement
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$ | 5,149,030 | $ | 5,665,411 | ||||
Work in process
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1,847,228 | 2,095,963 | ||||||
Building products
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4,941,766 | 4,692,327 | ||||||
Fuel, gypsum, paper sacks and other
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7,091,146 | 5,838,637 | ||||||
Operating and maintenance supplies
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11,898,371 | 11,751,562 | ||||||
Total inventories
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$ | 30,927,541 | $ | 30,043,900 | ||||
Refundable federal and state income taxes
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1,520,677 | - | ||||||
Deferred income taxes
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735,000 | 735,000 | ||||||
Prepaid expenses
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599,533 | 125,787 | ||||||
Total current assets
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$ | 50,664,920 | $ | 45,616,873 | ||||
PROPERTY, PLANT AND EQUIPMENT, at cost, less
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||||||||
accumulated depreciation and depletion of $178,130,522
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||||||||
in 2011 and $173,656,095 in 2010
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87,167,973 | 84,912,099 | ||||||
DEFERRED INCOME TAXES
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17,539,093 | 19,254,393 | ||||||
INVESTMENTS
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20,783,277 | 23,984,320 | ||||||
OTHER ASSETS
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1,904,441 | 331,143 | ||||||
$ | 178,059,704 | $ | 174,098,828 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
CURRENT LIABILITIES:
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||||||||
Accounts payable
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$ | 5,787,130 | $ | 5,054,236 | ||||
Line of credit payable
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7,574,661 | - | ||||||
Current portion of long-term debt
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2,873,145 | 2,823,648 | ||||||
Accrued liabilities
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5,484,131 | 7,932,115 | ||||||
Total current liabilities
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$ | 21,719,067 | $ | 15,809,999 | ||||
LONG-TERM DEBT
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9,079,210 | 9,154,087 | ||||||
ACCRUED POSTRETIREMENT BENEFITS
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35,557,759 | 34,782,978 | ||||||
ACCRUED PENSION EXPENSE
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13,149,064 | 12,723,073 | ||||||
STOCKHOLDERS' EQUITY:
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||||||||
Capital stock, par value $2.50 per share, one vote per share -
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||||||||
Authorized 10,000,000 shares, Issued and Outstanding 2,564,828
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||||||||
shares at 6/30/2011 and 2,532,328 shares at 12/31/2010
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$ | 6,412,070 | $ | 6,330,820 | ||||
Class B capital stock, par value $2.50 per share, supervoting
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||||||||
rights of ten votes per share, restricted transferability,
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||||||||
convertible at all times into Capital Stock on a share-for-
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||||||||
share basis - Authorized 10,000,000 shares, Issued and Outstanding
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||||||||
1,465,540 shares at 6/30/2011 and 1,480,690 shares at 12/31/2010
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3,663,850 | 3,701,725 | ||||||
Additional paid-in-capital
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2,485,125 | - | ||||||
Retained earnings
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97,939,977 | 102,270,564 | ||||||
Accumulated other comprehensive loss
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(11,946,418 | ) | (10,674,418 | ) | ||||
Total stockholders' equity
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$ | 98,554,604 | $ | 101,628,691 | ||||
$ | 178,059,704 | $ | 174,098,828 | |||||
See accompanying Notes to the Condensed Consolidated Financial Statements
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THE MONARCH CEMENT COMPANY AND SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND RETAINED EARNINGS
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||||||||||||||||
For the Three Months and the Six Months Ended June 30, 2011 and 2010 (Unaudited) | ||||||||||||||||
For the Three Months Ended
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For the Six Months Ended
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|||||||||||||||
June 30,
2011
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June 30,
2010
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June 30,
2011
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June 30,
2010
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|||||||||||||
NET SALES
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$ | 31,384,137 | $ | 34,073,747 | $ | 48,794,852 | $ | 52,268,473 | ||||||||
COST OF SALES
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27,228,173 | 26,562,233 | 48,292,303 | 47,221,231 | ||||||||||||
Gross profit from operations
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$ | 4,155,964 | $ | 7,511,514 | $ | 502,549 | $ | 5,047,242 | ||||||||
SELLING, GENERAL AND
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||||||||||||||||
ADMINISTRATIVE EXPENSES
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4,023,396 | 3,861,768 | 7,854,700 | 7,749,286 | ||||||||||||
Income (Loss) from operations
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$ | 132,568 | $ | 3,649,746 | $ | (7,352,151 | ) | $ | (2,702,044 | ) | ||||||
OTHER INCOME (EXPENSE):
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||||||||||||||||
Interest income
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$ | 31,755 | $ | 50,779 | $ | 80,639 | $ | 101,665 | ||||||||
Interest expense
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(144,197 | ) | (158,757 | ) | (220,977 | ) | (280,880 | ) | ||||||||
Gain on sale of equity investments
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2,584,382 | 7,667 | 5,197,438 | 11,839 | ||||||||||||
Dividend income
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49,269 | 47,402 | 107,183 | 121,516 | ||||||||||||
Other, net
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91,487 | (109,871 | ) | 257,355 | 662,544 | |||||||||||
$ | 2,612,696 | $ | (162,780 | ) | $ | 5,421,638 | $ | 616,684 | ||||||||
Income (Loss) before taxes
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$ | 2,745,264 | $ | 3,486,966 | $ | (1,930,513 | ) | $ | (2,085,360 | ) | ||||||
PROVISION FOR (BENEFIT FROM) INCOME TAXES
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70,000 | 975,000 | (540,000 | ) | 100,000 | |||||||||||
NET INCOME (LOSS)
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$ | 2,675,264 | $ | 2,511,966 | $ | (1,390,513 | ) | $ | (2,185,360 | ) | ||||||
RETAINED EARNINGS, beg. of period
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98,204,787 | 101,292,386 | 102,270,564 | 105,989,712 | ||||||||||||
Less cash dividends
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947,317 | 925,565 | 947,317 | 925,565 | ||||||||||||
Less purchase and retirement
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||||||||||||||||
of capital stock
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1,992,757 | - | 1,992,757 | - | ||||||||||||
RETAINED EARNINGS, end of period
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$ | 97,939,977 | $ | 102,878,787 | $ | 97,939,977 | $ | 102,878,787 | ||||||||
Basic earnings (losses) per share
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$ | 0.66 | $ | 0.62 | $ | (0.34 | ) | $ | (0.54 | ) | ||||||
Cash dividends per share
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$ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
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||||||||||||||||
For the Three Months and the Six Months Ended June 30, 2011 and 2010 (Unaudited) | ||||||||||||||||
For the Three Months Ended
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For the Six Months Ended
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|||||||||||||||
June 30,
2011
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June 30,
2010
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June 30,
2011
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June 30,
2010
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|||||||||||||
NET INCOME (LOSS)
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$ | 2,675,264 | $ | 2,511,966 | $ | (1,390,513 | ) | $ | (2,185,360 | ) | ||||||
UNREALIZED APPRECIATION (DEPRE-
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||||||||||||||||
CIATION) ON AVAILABLE FOR SALE
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||||||||||||||||
SECURITIES (Net of deferred tax
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||||||||||||||||
expense (benefit) of $(448,000), $(708,000),
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||||||||||||||||
$1,232,000 and $(444,000), respectively)
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(677,618 | ) | (1,064,333 | ) | 1,845,438 | (664,161 | ) | |||||||||
LESS: RECLASSIFICATION ADJUST-
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||||||||||||||||
MENT FOR REALIZED GAINS (LOSSES)
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||||||||||||||||
INCLUDED IN NET INCOME (LOSS)
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||||||||||||||||
(net of deferred tax expense (benefit) of
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||||||||||||||||
$1,036,000, $4,000, $2,080,000 and $4,000,
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||||||||||||||||
respectively)
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1,548,382 | 3,667 | 3,117,438 | 7,839 | ||||||||||||
POSTRETIREMENT LIABILITY (net of deferred
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||||||||||||||||
tax (benefit) expense of $-0-, $-0-, $-0- and $-0-,
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||||||||||||||||
respectively)
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- | - | - | 685,000 | ||||||||||||
COMPREHENSIVE INCOME (LOSS)
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$ | 449,264 | $ | 1,443,966 | $ | (2,662,513 | ) | $ | (2,172,360 | ) | ||||||
See accompanying Notes to the Condensed Consolidated Financial Statements
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THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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||||||||
For the Six Months Ended June 30, 2011 and 2010 (Unaudited) | ||||||||
2011
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2010
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|||||||
OPERATING ACTIVITIES:
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||||||||
Net loss
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$ | (1,390,513 | ) | $ | (2,185,360 | ) | ||
Adjustments to reconcile net loss to net cash
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||||||||
provided by (used for) operating activities:
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||||||||
Depreciation, depletion and amortization
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5,635,517 | 5,866,584 | ||||||
Deferred income taxes
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728,300 | 176,000 | ||||||
Gain on disposal of assets
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(39,083 | ) | (29,688 | ) | ||||
Realized gain on sale of equity investments
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(5,197,438 | ) | (11,839 | ) | ||||
Gain on disposal of other assets
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- | (700,000 | ) | |||||
Postretirement benefits and pension expense
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1,200,772 | 2,093,957 | ||||||
Change in assets and liabilities:
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||||||||
Receivables, net
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(3,294,241 | ) | (3,776,181 | ) | ||||
Inventories
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(595,021 | ) | (1,566,989 | ) | ||||
Refundable income taxes
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(1,520,677 | ) | (762,617 | ) | ||||
Prepaid expenses
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(473,746 | ) | (562,258 | ) | ||||
Other assets
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1,500 | 942 | ||||||
Accounts payable and accrued liabilities
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(456,307 | ) | 364,459 | |||||
Net cash used for operating activities
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$ | (5,400,937 | ) | $ | (1,092,990 | ) | ||
INVESTING ACTIVITIES:
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||||||||
Acquisition of property, plant and equipment
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$ | (2,430,708 | ) | $ | (4,010,752 | ) | ||
Proceeds from disposals of property, plant and equipment
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72,820 | 52,135 | ||||||
Payment for acquisition of business, net of cash acquired
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(534,392 | ) | - | |||||
Proceeds from disposals of other assets
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- | 700,000 | ||||||
Payment for purchases of equity investments
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(1,599,647 | ) | (190,867 | ) | ||||
Proceeds from disposals of equity investments
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7,878,129 | 205,487 | ||||||
Increase in short-term investments, net
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(10,166 | ) | - | |||||
Net cash provided by (used for) investing activities
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$ | 3,376,036 | $ | (3,243,997 | ) | |||
FINANCING ACTIVITIES:
|
||||||||
Increase in line of credit, net
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$ | 7,574,661 | $ | 7,842,924 | ||||
Payments on bank loans
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(1,531,063 | ) | (1,356,252 | ) | ||||
Payments on other long-term debt
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(509,305 | ) | (58,883 | ) | ||||
Cash dividends paid
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(2,793,305 | ) | (2,776,696 | ) | ||||
Purchases of capital stock
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(2,213,757 | ) | - | |||||
Net cash provided by financing activities
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$ | 527,231 | $ | 3,651,093 | ||||
Net decrease in cash and cash equivalents
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$ | (1,497,670 | ) | $ | (685,894 | ) | ||
CASH AND CASH EQUIVALENTS, beginning of year
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2,695,267 | 2,149,397 | ||||||
CASH AND CASH EQUIVALENTS, end of period
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$ | 1,197,597 | $ | 1,463,503 | ||||
Supplemental disclosures:
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||||||||
Interest paid, net of amount capitalized
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$ | 220,977 | $ | 285,475 | ||||
Income taxes paid, net of refunds
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$ | 385,527 | $ | 1,617 | ||||
Capital equipment additions included in accounts payable
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$ | 108,339 | $ | 14,898 | ||||
Non-cash investing activities:
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||||||||
Issuance of 105,750 shares of capital stock
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||||||||
related to acquisition of business
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$ | 2,749,500 | $ | - | ||||
Note payable related to acquisition of business | $ | 927,443 | $ | - | ||||
See accompanying Notes to the Condensed Consolidated Financial Statements
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THE MONARCH CEMENT COMPANY AND SUBSIDIARIES |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
June 30, 2011 and 2010 (Unaudited), and December 31, 2010 |
1.
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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.
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2.
|
Our Company groups its operations into two lines of business - Cement Business and Ready-Mixed Concrete Business. The "Cement Business" refers to our manufacture and sale of cement and "Ready-Mixed Concrete Business" refers to our ready-mixed concrete, concrete products, precast concrete construction, and sundry building materials business. Our Ready-Mixed Concrete Business includes precast concrete construction which involve short-term and long-term contracts. Short-term contracts for specific projects are generally of three to six months in duration. Long-term contracts relate to specific projects with terms in excess of one year from the contract date. Revenues for these contracts are recognized under the percentage of completion method of accounting using cost-to-cost measures. Revenues from contracts using the cost-to-cost measures of completion are recognized based on the ratio of contract costs incurred to date to total estimated contract costs. Full provision is made for any anticipated losses. The majority of the long-term contracts will allow only scheduled billings and contain retainage provisions under which 5% to 10% of the contract invoicing may be withheld by the customer pending project completion. As of June 30, 2011, the amount of billed retainage which is included in accounts receivable was approximately $55,000, all of which is expected to be collected within one year. The amount of billed retainage which was included in accounts receivable at December 31, 2010 was approximately $120,000. The amount of unbilled revenue in accounts receivable was approximately $357,000 and $380,000 at June 30, 2011 and December 31, 2010, respectively. Unbilled revenue contained approximately $3,000 and $43,000 of not-currently-billable retainage at June 30, 2011 and December 31, 2010, respectively, which is expected to be collected within one year.
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3.
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As of June 30, 2011, the amount of accounts payable related to property, plant and equipment was $108,339 compared to December 31, 2010 which was $12,495.
Depreciation, depletion and amortization related to manufacturing operations are recorded in Cost of Sales, those related to general operations are recorded in Selling, General and Administrative Expenses, and those related to non-operational activities are in Other, net on the Condensed Consolidated Statements of Income (Loss) and Retained Earnings.
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4.
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We did not incur any temporary LIFO liquidation gain for the six months ended June 30, 2011 or 2010. During the three months ended June 30, 2010 and again during the corresponding period in 2011, we restored the $0.2 million LIFO liquidation incurred in the first three months of each year as a result of reductions in finished cement and work in process inventory.
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5.
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Corporate assets for 2011 and 2010 include cash and cash equivalents, refundable income taxes, deferred income taxes, investments and other assets. Corporate assets for 2011 also include short-term investments. Following is a summary of the Company's business segment results for the periods indicated:
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Ready-
Mixed
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Adjustments
|
|||||||||||||||
Cement
Business |
Concrete
Business
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and
Eliminations
|
Consolidated
|
|||||||||||||
For the Three Months Ended 6/30/11
|
||||||||||||||||
Sales to unaffiliated customers
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$ | 12,890,501 | $ | 18,493,636 | $ | - | $ | 31,384,137 | ||||||||
Intersegment sales
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3,721,722 | - | (3,721,722 | ) | - | |||||||||||
Total net sales
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$ | 16,612,223 | $ | 18,493,636 | $ | (3,721,722 | ) | $ | 31,384,137 | |||||||
Income (Loss) from operations
|
$ | 1,352,876 | $ | (1,220,308 | ) | $ | 132,568 | |||||||||
Other income, net
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$ | 2,612,696 | ||||||||||||||
Income before income taxes
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$ | 2,745,264 | ||||||||||||||
Capital Expenditures | $ | 820,951 | $ | 509,846 | $ | 1,330,797 |
|
Ready-
Mixed |
Adjustments
|
||||||||||||||
Cement
Business |
Concrete
Business |
and
Eliminations |
Consolidated | |||||||||||||
For the Three Months Ended 6/30/10
|
||||||||||||||||
Sales to unaffiliated customers
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$ | 13,885,233 | $ | 20,188,514 | $ | - | $ | 34,073,747 | ||||||||
Intersegment sales
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4,320,524 | - | (4,320,524 | ) | - | |||||||||||
Total net sales
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$ | 18,205,757 | $ | 20,188,514 | $ | (4,320,524 | ) | $ | 34,073,747 | |||||||
Income (Loss) from operations
|
$ | 4,275,487 | $ | (625,741 | ) | $ | 3,649,746 | |||||||||
Other expense, net
|
(162,780 | ) | ||||||||||||||
Income before income taxes
|
$ | 3,486,966 | ||||||||||||||
Capital Expenditures
|
$ | 689,977 | $ | 1,081,230 | $ | 1,771,207 |
For the Six Months Ended 6/30/2011
|
||||||||||||||||
Sales to unaffiliated customers
|
$ | 18,997,645 | $ | 29,797,207 | $ | - | $ | 48,794,852 | ||||||||
Intersegment sales
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5,911,723 | - | (5,911,723 | ) | - | |||||||||||
Total net sales
|
$ | 24,909,368 | $ | 29,797,207 | $ | (5,911,723 | ) | $ | 48,794,852 | |||||||
Loss from operations
|
$ | (3,585,507 | ) | $ | (3,766,644 | ) | $ | (7,352,151 | ) | |||||||
Other income, net
|
5,421,638 | |||||||||||||||
Loss before income taxes
|
$ | (1,930,513 | ) | |||||||||||||
Capital Expenditures | $ | 1,348,043 | $ | 1,178,509 | $ | 2,526,552 |
For the Six Months Ended 6/30/10
|
||||||||||||||||
Sales to unaffiliated customers
|
$ | 20,831,116 | $ | 31,437,357 | $ | - | $ | 52,268,473 | ||||||||
Intersegment sales
|
6,672,183 | - | (6,672,183 | ) | - | |||||||||||
Total net sales
|
$ | 27,503,299 | $ | 31,437,357 | $ | (6,672,183 | ) | $ | 52,268,473 | |||||||
Income (Loss) from operations
|
$ | 1,015,077 | $ | (3,717,121 | ) | $ | (2,702,044 | ) | ||||||||
Other income, net
|
616,684 | |||||||||||||||
Loss before income taxes
|
$ | (2,085,360 | ) | |||||||||||||
Capital Expenditures
|
$ | 1,155,295 | $ | 2,121,877 | $ | 3,277,172 |
Balance as of 6/30/11
|
|||||||||||||||||
Identifiable Assets
|
$ | 89,677,856 | $ | 44,691,597 | $ | 134,369,453 | |||||||||||
Corporate Assets
|
43,690,251 | ||||||||||||||||
|
|
$ | 178,059,704 |
Balance as of 6/30/10
|
|||||||||||||||||
Identifiable Assets
|
$ | 96,126,607 | $ | 42,898,774 | $ | 139,025,381 | |||||||||||
Corporate Assets
|
40,490,864 | ||||||||||||||||
|
|
$ | 179,516,245 |
6.
|
Realized gains (losses) on equity investments are computed using the specific identification method. The Company defines fair value as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company measures fair value using the following fair value hierarchy which is based on three levels of inputs intended to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value:
Level 1 - quoted prices in active markets for identical assets or liabilities.
Level 2 - observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Cash and cash equivalents, short-term investments, receivables, accounts payable and long-term debt have carrying values that approximate fair values. Equity securities for which the Company has no immediate plan to sell but that may be sold in the future are classified as available for sale. If the fair value of the equity security is readily determinable, it is carried at fair value and unrealized gains and losses are recorded, net of related income tax effects, in stockholders' equity. Realized gains and losses, based on the specifically identified cost of the security, are included in net income (loss). The Company's valuation techniques used to measure the fair value of its marketable equity securities were derived from quoted prices in active markets for identical assets. Equity securities whose fair value is not readily determinable are carried at cost unless the Company is aware of significant adverse effects which have impaired the investments. Investments that are recorded at cost are evaluated quarterly for events that may adversely impact their fair value.
|
Fair Value at Reporting Date Using:
|
||||||||||||||||
|
Quoted Prices
|
|
||||||||||||||
in Active
|
Significant
|
|
||||||||||||||
Markets for
|
Other
|
Significant
|
||||||||||||||
Identical | Observable | Unobservable | ||||||||||||||
Assets
|
Inputs
|
Input
|
||||||||||||||
Assets: |
06/30/2011
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
Available-for-sale equity securities
|
|
|
|
|||||||||||||
Cement industry | $ | 8,705,443 | $ | 8,705,443 | $ | - | $ | - | ||||||||
General building materials industry | 4,114,619 | 4,114,619 | - | - | ||||||||||||
Oil and gas refining and marketing industry | 4,773,818 | 4,773,818 | - | - | ||||||||||||
Residential construction industry
|
734,785 | 734,785 | - | - | ||||||||||||
Total assets measured at fair value
|
$ | 18,328,665 | $ | 18,328,665 | $ | - | $ | - | ||||||||
Assets:
|
12/31/2010 | |||||||||||||||
Available-for-sale equity securities
|
||||||||||||||||
Cement industry | $ | 9,499,615 | $ | 9,499,615 | $ | - | $ | - | ||||||||
General building materials industry | 3,623,769 | 3,623,769 | - | - | ||||||||||||
Oil and gas refining and marketing industry | 7,545,978 | 7,545,978 | - | - | ||||||||||||
Residential construction industry
|
896,346 | 896,346 | - | - | ||||||||||||
Total assets measured at fair value
|
$ | 21,565,708 | $ | 21,565,708 | $ | - | $ | - |
Available-for-sale equity securities
|
Less than 12 Months
|
12 Months or Greater
|
Total | |||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||
June 30, 2011
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
Fair Value
|
Losses
|
||||||||||||||||||
Cement industry
|
$ | 234,108 | $ | 12,417 | $ | 16,000 | $ | 2,116 | $ | 250,108 | $ | 14,533 | ||||||||||||
General building materials | ||||||||||||||||||||||||
industry | 967,103 | 139,940 | - | - | 967,103 | 139,940 | ||||||||||||||||||
Residential construction | ||||||||||||||||||||||||
industry
|
111,644 | 7,534 | 23,746 | 5,455 | 135,390 | 12,989 | ||||||||||||||||||
Total
|
$ | 1,312,855 | $ | 159,891 | $ | 39,746 | $ | 7,571 | $ | 1,352,601 | $ | 167,462 |
December 31, 2010 | ||||||||||||||||||||||||
Cement industry
|
$ | - | $ | - | $ | 16,400 | $ | 1,716 | $ | 16,400 | $ | 1,716 | ||||||||||||
Residential construction | ||||||||||||||||||||||||
industry
|
488,379 | 86,054 | - | - | 488,379 | 86,054 | ||||||||||||||||||
Total
|
$ | 488,379 | $ | 86,054 | $ | 16,400 | $ | 1,716 | $ | 504,779 | $ | 87,770 |
Amortized
|
Gross Unrealized
|
Fair
|
||||||||||||||
June 30, 2011
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Available-for-sale equity securities
|
||||||||||||||||
Cement industry
|
$
|
4,813,000
|
$
|
3,892,000
|
$
|
-
|
$
|
8,705,000
|
||||||||
General building materials industry
|
3,973,000
|
141,000
|
-
|
4,114,000
|
||||||||||||
Oil and gas refining and marketing industry
|
782,000
|
3,991,500
|
-
|
4,773,500
|
||||||||||||
Residential construction industry
|
599,000
|
135,500
|
-
|
734,500
|
||||||||||||
Total available for sale equity securities
|
$
|
10,167,000
|
$
|
8,160,000
|
$
|
-
|
$
|
18,327,000
|
||||||||
Less: Deferred taxes on unrealized holding gains
|
3,264,000
|
|||||||||||||||
Unrealized gains recorded in equity, net of deferred tax | $ | 4,896,000 |
Amortized | Gross Unrealized |
Fair
|
||||||||||||||
December 31, 2010
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Available-for-sale equity securities
|
||||||||||||||||
Cement industry
|
$
|
4,971,000
|
$
|
4,529,000
|
$
|
-
|
$
|
9,500,000
|
||||||||
General building materials industry
|
2,866,000
|
758,000
|
-
|
3,624,000
|
||||||||||||
Oil and gas refining and marketing industry
|
2,600,000
|
4,946,000
|
-
|
7,546,000
|
||||||||||||
Residential construction industry
|
849,000
|
47,000
|
-
|
896,000
|
||||||||||||
Total available for sale equity securities
|
$
|
11,286,000
|
$
|
10,280,000
|
$
|
-
|
$
|
21,566,000
|
||||||||
Less: Deferred taxes on unrealized holding gains
|
4,112,000
|
|||||||||||||||
Unrealized gains recorded in equity, net of deferred tax
|
$
|
6,168,000
|
June 30, 2011 | December 31, 2010 | |||||||
Proceeds from sale of equity securities
|
$ | 7,878,129 | $ | 412,532 | ||||
Realized gain/(loss) on equity securities | $ | 5,197,438 | $ | (79,793 | ) | |||
Realized losses due to other-than-temporary | ||||||||
impairment of equity securities | $ | - | $ | (858,787 | ) |
7.
|
The following table presents the components of net periodic pension and postretirement benefit costs allocated to Cost of Sales and Selling, General and Administrative expenses for the six months ended June 30, 2011 and 2010:
|
Pension Benefits | Other Benefits | |||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Service cost
|
$ | 375,834 | $ | 334,490 | $ | 307,132 | $ | 272,785 | ||||||||
Interest cost
|
1,010,353 | 1,031,658 | 872,456 | 934,243 | ||||||||||||
Less: Expected return on plan assets
|
968,550 | 862,668 | - | - | ||||||||||||
Amortization of prior service cost
|
54,989 | 54,989 | (25,376 | ) | - | |||||||||||
Recognized net actuarial loss
|
456,494 | 434,327 | - | - | ||||||||||||
Unrecognized net loss
|
- | - | 340,437 | 360,454 | ||||||||||||
Net periodic expense
|
$ | 929,120 | $ | 992,796 | $ | 1,494,649 | $ | 1,567,482 |
Pension Benefits | Other Benefits | |||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Service cost
|
$ | 187,917 | $ | 167,245 | $ | 144,716 | $ | 136,392 | ||||||||
Interest cost
|
505,176 | 515,829 | 411,088 | 467,122 | ||||||||||||
Less: Expected return on plan assets
|
484,275 | 431,334 | - | - | ||||||||||||
Amortization of prior service cost
|
27,495 | 27,495 | (11,957 | ) | - | |||||||||||
Recognized net actuarial loss
|
228,247 | 217,163 | - | - | ||||||||||||
Unrecognized net loss
|
- | - | 160,409 | 180,227 | ||||||||||||
Net periodic expense
|
$ | 464,560 | $ | 496,398 | $ | 704,256 | $ | 783,741 |
8.
|
Other, net contains miscellaneous nonoperating income (expense) items other than interest income, interest expense, gains on sale of equity investments and dividend income.
|
9.
|
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 4,078,756 and 4,046,069 in the second quarter and first six months of 2011, respectively. The weighted average number of shares outstanding was 4,024,198 in the second quarter and first six months of 2010. The Company has no capital stock equivalents and therefore, does not report diluted earnings per share.
|
10.
|
The Company files income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal or state income tax examinations by tax authorities for years before 2007. The Company believes it is not subject to any significant tax risk. The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor were any interest expenses recognized during the six months ended June 30, 2011 or June 30, 2010.
As a result of the Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act of 2010, we will no longer be able to claim an income tax deduction related to prescription drug benefits provided to retirees and reimbursed under the Medicare Part D retiree drug subsidy beginning in 2013. This resulted in a $685,000 charge to income tax provision during the first quarter of 2010.
|
11.
|
Pursuant to a Stock Purchase Agreement among the Company and the owners of Kay Concrete Materials Co. ("Kay Concrete"), on April 15, 2011 the Company acquired all of the issued and outstanding shares of common stock of Kay Concrete, a ready-mix concrete company located in southwest Missouri. The purpose of the acquisition was to expand our ready-mixed concrete business in the region. The aggregate consideration paid by the Company at closing was approximately $5.0 million consisting of $1.4 million cash, 105,750 shares of the Company's capital stock valued at $2.7 million based on the April 15, 2011 price per share of $26.00, and a note payable of $0.9 million.
In accordance with Accounting Standards Codification ("ASC") 805, the Company determined the assets and liabilities acquired constituted a business and applied purchase accounting to the assets acquired and the liabilities assumed. Since Kay Concrete is not a substantial subsidiary, pro forma information is not provided for the combined entity. The following table summarizes the consideration paid for acquisition of the assets acquired and the liabilities assumed at the acquisition date as well as the fair value at the acquisition date:
|
Consideration:
|
||||||
Cash paid, gross
|
$ | 1,360,000 | ||||
Fair value of Monarch stock given
|
||||||
105,750 shares at $26.00 per share
|
2,749,500 | |||||
Note payable | 927,443 | |||||
$ | 5,036,943 | |||||
Fair Value of assets acquired and liabilities assumed:
|
||||||
Assets
|
||||||
Cash
|
$ | 825,608 | ||||
Accounts receivable
|
363,246 | |||||
Inventories
|
288,620 | |||||
Property, plant and equipment
|
5,255,986 | |||||
Goodwill/non-compete
|
1,565,443 | |||||
Other assets
|
180,712 | |||||
Liabilities
|
||||||
Accounts payable
|
(120,735 | ) | ||||
Short-term debt
|
(175,000 | ) | ||||
Accrued liabilities
|
(56,937 | ) | ||||
Long-term debt
|
(1,255,000 | ) | ||||
Deferred taxes
|
(1,835,000 | ) | ||||
Total:
|
$ | 5,036,943 |
13.
|
Subsequent events have been evaluated through the date the financial statements were issued. During this period, no material recognizable subsequent events were identified.
|
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES |
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS |
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Period
|
(a) Total Number of Shares (or Units) Purchased
|
(b) Average Price Paid per Share (or Unit)
|
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs *
|
||||||||||||
Beginning repurchase authority** | 186,728 | |||||||||||||||
April 1-30, 2011
|
0 | 0 | 0 | 186,728 | ||||||||||||
May 1-31, 2011
|
0 | 0 | 0 | 186,728 | ||||||||||||
June 1-30, 2011
|
88,400 | 25.04 | 88,400 | 98,328 | ||||||||||||
Total
|
88,400 | $ | 25.04 | 88,400 | 98,328 | |||||||||||
*
|
In 1996, our Board of Directors authorized the purchase, through open market transactions, of up to 400,000 shares of our Company's capital stock. The authorization has no expiration. Management was given discretion to determine the number and pricing of the shares to be purchased as well as the timing of any such purchases. |
** |
The beginning repurchase authority has been revised by 73,576 shares (from 113,152 shares to 186,728 shares) after a recalculation of the maximum number of shares that may yet be purchased under the plans or programs.
|
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 9, 2011.
|
32.2
|
18 U.S.C. Section 1350 Certificate of the Chief Financial Officer dated August 9, 2011.
|
95
|
Dodd-Frank Act Section 1503(a) Disclosures of Mine Safety and Health Administration Safety Data.
|
101*
|
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011, formatted in XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income (Loss) and Retained Earnings, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.
|
The Monarch Cement Company | |||||
(Registrant) | |||||
Date August 9, 2011 | /s/ Walter H. Wulf, Jr. | ||||
Walter H. Wulf, Jr. | |||||
President and | |||||
Chairman of the Board | |||||
(principal executive officer) | |||||
Date August 9, 2011 | /s/ Debra P. Roe | ||||
Debra P. Roe, CPA | |||||
Chief Financial Officer and | |||||
Assistant Secretary-Treasurer | |||||
(principal financial officer and | |||||
principal accounting officer) |
1.
|
I have reviewed this 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
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; and
|
|
d)
|
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 (the registrant's fourth fiscal quarter in the case of an annual report) 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 the registrant's board of directors (or persons performing the equivalent functions):
|
|
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 reporting.
|
1.
|
I have reviewed this 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
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; and
|
|
d)
|
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 (the registrant's fourth fiscal quarter in the case of an annual report) 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 the registrant's board of directors (or persons performing the equivalent functions):
|
|
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 reporting.
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Three month period ended June 30, 2011 | ||
Mine Name
(MSHA ID)
|
The Monarch
Cement Company
(1400124)
|
Valencia Sand Pit #1
(1400503)
|
Pratt Sand
(1401712)
|
Total No. of significant and substantial violations
under Mine Act §104
|
6
|
0
|
0
|
Total no. of orders under Mine Act §104(b)
|
0
|
0
|
0
|
Total no. of unwarrantable compliance failure
citations and orders under Mine Act §104(d)
|
0
|
0
|
0
|
Total no. of flagrant violations under Mine Act
§110(b)(2)
|
0
|
0
|
0
|
Total no. of imminent danger orders under Mine
Act §107(a)
|
0
|
0
|
0
|
Total dollar value of proposed assessments from
MSHA for the period
|
$3,645
|
0
|
0
|
Total no. of mining related fatalities
|
0
|
0
|
0
|
Received written notice under Mine Act §104(e)
(yes/no)?
|
no
|
no
|
no
|
Pending legal action before the Federal Mine
Safety and Health Review Commission (yes/no)?
|
yes
|
no
|
no
|
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Allowance for receivables | $ 650,813 | $ 707,000 |
Accumulated depreciation and depletion | $ 178,130,522 | $ 173,656,095 |
Capital stock, par value | $ 2.5 | $ 2.5 |
Capital stock, shares authorized | 10,000,000 | 10,000,000 |
Capital stock, shares issued | 2,564,828 | 2,532,328 |
Capital stock, shares outstanding | 2,564,828 | 2,532,328 |
Class B Capital Stock [Member]
|
 |  |
Capital stock, par value | $ 2.5 | $ 2.5 |
Capital stock, shares authorized | 10,000,000 | 10,000,000 |
Capital stock, shares issued | 1,465,540 | 1,480,690 |
Capital stock, shares outstanding | 1,465,540 | 1,480,690 |
Condensed Consolidated Statements Of Income (Loss) And Retained Earnings (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Condensed Consolidated Statements Of Income (Loss) And Retained Earnings | Â | Â | Â | Â |
NET SALES | $ 31,384,137 | $ 34,073,747 | $ 48,794,852 | $ 52,268,473 |
COST OF SALES | 27,228,173 | 26,562,233 | 48,292,303 | 47,221,231 |
Gross profit from operations | 4,155,964 | 7,511,514 | 502,549 | 5,047,242 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 4,023,396 | 3,861,768 | 7,854,700 | 7,749,286 |
Income (Loss) from operations | 132,568 | 3,649,746 | (7,352,151) | (2,702,044) |
OTHER INCOME (EXPENSE): | Â | Â | Â | Â |
Interest income | 31,755 | 50,779 | 80,639 | 101,665 |
Interest expense | (144,197) | (158,757) | (220,977) | (280,880) |
Gain on sale of equity investments | 2,584,382 | 7,667 | 5,197,438 | 11,839 |
Dividend income | 49,269 | 47,402 | 107,183 | 121,516 |
Other, net | 91,487 | (109,871) | 257,355 | 662,544 |
Other Income (Expense), Total | 2,612,696 | (162,780) | 5,421,638 | 616,684 |
Income (Loss) before taxes | 2,745,264 | 3,486,966 | (1,930,513) | (2,085,360) |
PROVISION FOR (BENEFIT FROM) INCOME TAXES | 70,000 | 975,000 | (540,000) | 100,000 |
NET INCOME (LOSS) | 2,675,264 | 2,511,966 | (1,390,513) | (2,185,360) |
RETAINED EARNINGS, beg. of period | 98,204,787 | 101,292,386 | 102,270,564 | 105,989,712 |
Less cash dividends | 947,317 | 925,565 | 947,317 | 925,565 |
Less purchase and retirement of capital stock | 1,992,757 | 0 | 1,992,757 | 0 |
RETAINED EARNINGS, end of period | $ 97,939,977 | $ 102,878,787 | $ 97,939,977 | $ 102,878,787 |
Basic earnings (losses) per share | $ 0.66 | $ 0.62 | $ (0.34) | $ (0.54) |
Cash dividends per share | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.23 |
Document And Entity Information
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
Jul. 22, 2011
Capital Stock [Member]
|
Jul. 22, 2011
Class B Capital Stock [Member]
|
|
Document Type | 10-Q | Â | Â |
Amendment Flag | false | Â | Â |
Document Period End Date | Jun. 30, 2011 | ||
Document Fiscal Period Focus | Q2 | Â | Â |
Document Fiscal Year Focus | 2011 | Â | Â |
Entity Registrant Name | MONARCH CEMENT CO | Â | Â |
Entity Central Index Key | 0000067517 | Â | Â |
Current Fiscal Year End Date | --12-31 | Â | Â |
Entity Filer Category | Accelerated Filer | Â | Â |
Entity Common Stock, Shares Outstanding | Â | 2,564,828 | 1,465,540 |
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Business Segments
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Business Segments | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments |
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Income Taxes
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6 Months Ended | ||
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Jun. 30, 2011
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Income Taxes | Â | ||
Income Taxes |
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Summary Of Accounting Policies
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6 Months Ended | ||
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Jun. 30, 2011
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Summary Of Accounting Policies | Â | ||
Summary Of Accounting Policies |
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Pension And Postretirement Benefit Costs
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Pension And Postretirement Benefit Costs | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension And Postretirement Benefit Costs |
The following table presents the components of net periodic pension and postretirement benefit costs allocated to Cost of Sales and Selling, General and Administrative expenses for the three months ended June 30, 2011 and 2010:
As previously disclosed in our financial statements for the year ended December 31, 2010, Monarch expects to contribute approximately $3,120,000 to the pension fund in 2011. As of June 30, 2011, we have contributed approximately $503,000 and anticipate contributing an additional $2,617,000 to this plan in 2011 for a total of $3,120,000.
The other benefits consist of postretirement benefits that are self-insured by Monarch and are paid out of Monarch's general assets. As previously disclosed in our financial statements for the year ended December 31, 2010, Monarch expects expenditures of approximately $1,775,000 for this plan in 2011. As of June 30, 2011, we have contributed approximately $720,000 and anticipate contributing an additional $1,055,000 on this plan in 2011 for a total of $1,775,000. |
Recently Adopted Accounting Standards
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6 Months Ended |
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Jun. 30, 2011
|
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Recently Adopted Accounting Standards | Â |
Recently Adopted Accounting Standards |
Other Nonoperating Income Or Expense
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6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
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Other Nonoperating Income Or Expense | Â | ||
Other Nonoperating Income Or Expense |
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Fair Value Measurement
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Fair Value Measurement | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement |
The aggregate amount of equity securities carried at cost, for which the Company has not elected the fair value option, was $2.5 million as of June 30, 2011. The remaining $18.3 million in equity security investments are stated at fair value. As of December 31, 2010, the aggregate amount of equity securities carried at cost was $2.4 million and the remaining $21.6 million in equity security investments were stated at fair value. The following table summarizes the bases used to measure certain assets at fair value on a recurring basis in the balance sheet:
No reconciliation (roll forward) of the beginning and ending balances for Level 3 is presented since the Company does not have any assets or liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during any of the periods reported in the table above. The Company has no liabilities in either year requiring remeasurement to fair value on a recurring basis in the balance sheet. The Company has no additional assets or liabilities in either year requiring remeasurement to fair value on a non-recurring basis in the balance sheet.
The following table shows the unrealized losses and fair value of the Company's investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2011 and December 31, 2010:
June 30, 2011 Impairment Analysis - - The Company's investments in marketable equity securities carried at fair value were evaluated for impairment by comparing the specifically identified cost of each investment to market price. As a result of these evaluations, the Company did not identify any other-than-temporary impairments in investments which would have resulted in a recognized loss in earnings of equity investments. The Company did identify some specific investments in available-for-sale equity securities that were not other-than-temporarily impaired resulting in the recognition of unrealized losses (see table above). These unrealized losses relate to investments in the common stock of four companies; one in the general building materials industry, one in the residential construction industry and two in the cement industry. When the Company evaluated impairment by comparing the specifically identified cost of each investment to market price as of July 15, 2011, the general building materials industry securities had increased their temporary impairments to approximately $296,000 (8.1% below cost). The residential construction industry securities had increased their temporary impairments to approximately $29,800 (9.2% below cost). The temporary impairment in the securities of one company in the cement industry remained unchanged from the June 30, 2011 levels while the second company's securities increased their temporary impairments to approximately $41,000 (16.8% below cost). The Company evaluated the near-term prospects of all of the issuers in relation to the severity of the impairments (fair value was approximately 12.6% less than cost in the general building materials industry investment, approximately 8.8% less than cost in the residential construction industry investment, and approximately 5.0% less than cost in the cement industry investment as of June 30, 2011) and the duration of the impairments (less than three months in the general building materials industry investment, approximately 6 to 12 months in the residential construction industry investment and less than 3 months in the majority of the cement industry investment). Based on that evaluation, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2011. The Company owns stock in two privately-owned companies accounted for by the cost method; one in the brick industry and the other in the ethanol production industry. These investments were evaluated for impairment based on average cost and specific identification, respectively. The evaluations of the ethanol production industry investment were based on quoted prices in markets that are not active and no impairments were identified during the year. Since there is not an active market for the brick industry investment, the Company relied on a discounted future net cash flow valuation of the investee, which did not identify any impairment. As a result of those evaluations, the Company does not consider these cost-method investments to be impaired at June 30, 2011. The aggregate cost of the Company's cost-method investments totaled $2.5 million at June 30, 2011. December 31, 2010 Impairment Analysis - - The Company's investments in marketable equity securities carried at fair value were evaluated for impairment by comparing the specifically identified cost of each investment to market price. In its third quarter evaluations, the Company identified a $0.9 million other-than-temporary impairment in its general building materials industry investments, resulting in a recognized loss in earnings of equity investments. The fair value of those investments then became the new cost basis. No further other-than-temporary impairments were identified in the fourth quarter. In its fourth quarter evaluation, the Company identified some specific investments in marketable equity securities it believes are temporarily impaired resulting in the recognition of unrealized losses (see 2010 information in table above). These unrealized losses relate to investments in the common stock of two companies; one in the residential construction industry and another in the cement industry. When the Company evaluated the impairments by comparing the specifically identified cost of each investment to market price as of February 14, 2011, the residential construction industry securities had recovered approximately $8,400 (9.8%) of their December 31, 2010 temporary impairments. The cement industry securities slightly increased their temporary impairments. The Company evaluated the near-term prospects of all of the issuers in relation to the severity of the impairments (fair value was approximately 15 percent less than cost in the residential construction industry investment and approximately 9 percent less than cost in the cement industry investment as of December 31, 2010) and the duration of the impairments (approximately 6 months in the residential construction industry investment and 12 months in the cement industry investment). Based on that evaluation, the Company does not consider these investments to be other-than-temporarily impaired at December 31, 2010.
The Company owns stock in two privately-owned companies accounted for by the cost method; one in the brick industry and the other in the ethanol production industry. These investments were evaluated for impairment based on average cost and specific identification, respectively. The evaluations of the ethanol production industry investment were based on quoted prices in markets that are not active and no impairments were identified during the year. Since there is not an active market for the brick industry investment, the Company relied on a discounted future net cash flow valuation of the investee, which did not identify any impairment. As a result of those evaluations, the Company does not consider these cost-method investments to be impaired at December 31, 2010. The aggregate cost of the Company's cost-method investments totaled $2.4 million at December 31, 2010.
Investment Results - - The investment results for June 30, 2011 and December 31, 2010 are as follows:
Investment-related cash flow information for June 30, 2011 and December 31, 2010 are as follows:
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Condensed Consolidated Statements Of Comprehensive Income (Loss) (Parenthetical) (USD $)
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Condensed Consolidated Statements Of Comprehensive Income (Loss) | Â | Â | Â | Â |
Deferred tax expense (benefit) for unrealized appreciation (depreciation) on available for sale securities | $ (448,000) | $ (708,000) | $ 1,232,000 | $ (444,000) |
Deferred tax expense (benefit) for reclassification adjustment for realized gains (losses) included in net income | 1,036,000 | 4,000 | 2,080,000 | 4,000 |
Deferred tax (benefit) expense for Post Retirement Liability | $ 0 | $ 0 | $ 0 | $ 0 |
Accounts Receivable
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6 Months Ended | ||
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Jun. 30, 2011
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Accounts Receivable | Â | ||
Accounts Receivable |
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Property, Plant And Equipment
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6 Months Ended | ||
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Jun. 30, 2011
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Property, Plant And Equipment | Â | ||
Property, Plant And Equipment |
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Business Acquisition
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Jun. 30, 2011
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Business Acquisition |
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Inventory
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6 Months Ended | ||
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Jun. 30, 2011
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Inventory | Â | ||
Inventory |
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Condensed Consolidated Statements Of Comprehensive Income (Loss) (USD $)
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
|
Jun. 30, 2010
|
|
Condensed Consolidated Statements Of Comprehensive Income (Loss) | Â | Â | Â | Â |
NET INCOME (LOSS) | $ 2,675,264 | $ 2,511,966 | $ (1,390,513) | $ (2,185,360) |
UNREALIZED APPRECIATION (DEPRECIATION) ON AVAILABLE FOR SALE SECURITIES (Net of deferred tax expense (benefit) of $(448,000), $(708,000), $1,232,000 and $(444,000), respectively) | (677,618) | (1,064,333) | 1,845,438 | (664,161) |
RECLASSIFICATION ADJUSTMENT FOR REALIZED (GAINS) LOSSES INCLUDED IN NET INCOME (LOSS) (net of deferred tax expense (benefit) of $1,036,000, $4,000, $2,080,000 and $4,000, respectively) | (1,548,382) | (3,667) | (3,117,438) | (7,839) |
POSTRETIREMENT LIABILITY (net of deferred tax (benefit) expense of $-0-, $-0-, $-0- and $-0-, respectively) | 0 | 0 | 0 | 685,000 |
COMPREHENSIVE INCOME (LOSS) | $ 449,264 | $ 1,443,966 | $ (2,662,513) | $ (2,172,360) |
Earnings Per Share
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6 Months Ended | ||
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Jun. 30, 2011
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Earnings Per Share | Â | ||
Earnings Per Share |
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Subsequent Events
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6 Months Ended | ||
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Jun. 30, 2011
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Subsequent Events | Â | ||
Subsequent Events |
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