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 March 31, 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 May 8, 2003, there were 2,369,861 shares of Capital Stock, par value
$2.50 per share outstanding and 1,657,097 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
March 31, 2003 and December 31, 2002
ASSETS 2 0 0 3 2 0 0 2
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 2,249,977 $ 3,909,215
Receivables, less allowances of $666,000 in 2003
and $644,000 in 2002 for doubtful accounts 11,204,258 15,916,614
Inventories, priced at cost which is not in
excess of market-
Cost determined by last-in, first-out method-
Finished cement $ 5,794,560 $ 1,386,348
Work in process 1,457,727 626,130
Building products 1,145,630 1,119,723
Cost determined by first-in, first-out method-
Fuel, gypsum, paper sacks and other 4,723,711 4,164,573
Cost determined by average method-
Operating and maintenance supplies 7,862,048 8,059,488
Total inventories $ 20,983,676 $ 15,356,262
Refundable federal and state income taxes 1,164,306 562,496
Deferred income taxes 593,000 593,000
Prepaid expenses 963,336 82,304
Total current assets $ 37,158,553 $ 36,419,891
PROPERTY, PLANT AND EQUIPMENT, at cost, less
accumulated depreciation and depletion of
$98,574,003 in 2003 and $96,128,254 in 2002 81,283,068 82,331,077
DEFERRED INCOME TAXES 4,077,585 4,038,000
OTHER ASSETS 10,556,807 10,717,296
$133,076,013 $133,506,264
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 5,509,868 $ 5,845,901
Bank loan payable 6,687,798 3,048,076
Current portion of advancing term loan 3,278,080 3,255,476
Accrued liabilities 3,476,378 5,011,856
Total current liabilities $ 18,952,124 $ 17,161,309
LONG-TERM DEBT 22,406,663 23,284,663
ACCRUED POSTRETIREMENT BENEFITS 9,377,010 9,322,377
ACCRUED PENSION EXPENSE 2,502,952 2,418,375
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 1,810,383 1,969,101
STOCKHOLDERS' INVESTMENT:
Capital stock, par value $2.50 per share,
1 vote per share - Authorized 10,000,000
shares, Issued 2,366,991 shares at 3/31/2003
and 2,344,293 shares at 12/31/2002 $ 5,917,478 $ 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
1,659,967 shares at 3/31/2003 and 1,682,665
shares at 12/31/2002 4,149,917 4,206,662
Retained earnings 69,318,486 70,582,044
Accumulated other comprehensive loss (1,359,000) (1,299,000)
Total stockholders' investment $ 78,026,881 $ 79,350,439
$133,076,013 $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 Ended March 31, 2003 and 2002 (Unaudited)
2003 2002
NET SALES $18,969,452 $22,871,653
COST OF SALES 17,963,866 21,201,324
Gross profit from operations $ 1,005,586 $ 1,670,329
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2,883,277 2,585,668
Loss from operations $(1,877,691) $ (915,339)
OTHER INCOME (EXPENSE):
Interest income $ 56,982 $ 41,094
Interest expense (253,982) (172,515)
Other, net 236,133 (88,848)
$ 39,133 $ (220,269)
Loss before taxes on income $(1,838,558) $(1,135,608)
BENEFIT FROM TAXES ON INCOME (575,000) (335,000)
NET LOSS $(1,263,558) $ (800,608)
RETAINED EARNINGS, beginning of period 70,582,044 67,900,126
RETAINED EARNINGS, end of period $69,318,486 $67,099,518
Basic loss per share $(.31) $(.20)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2003 and 2002 (Unaudited)
2003 2002
NET LOSS $(1,263,558) $ (800,608)
UNREALIZED APPRECIATION (DEPRECIATION)
ON AVAILABLE FOR SALE SECURITIES (Net
of deferred tax expense (benefit) of
$(40,000) and $195,000 for 2003 and 2002,
respectively) (60,000) 290,000
COMPREHENSIVE LOSS $(1,323,558) $ (510,608)
See notes to condensed consolidated financial statements
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2003 and 2002 (Unaudited)
2003 2002
OPERATING ACTIVITIES:
Net loss $(1,263,558) $ (800,608)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and depletion 2,647,551 2,529,211
Minority interest in losses of subsidiaries (158,718) (90,932)
Deferred income taxes 415 -
Gain on disposal of assets (20,563) (14,148)
Realized gain on sale of other investments (26,011) -
Change in assets and liabilities:
Receivables, net 4,711,959 35,971
Inventories (5,627,414) (3,871,723)
Refundable federal and state income taxes (601,810) (102,163)
Prepaid expenses (881,032) (375,367)
Other assets 3,415 3,966
Accounts payable and accrued liabilities (287,747) (557,462)
Accrued postretirement benefits 54,633 67,902
Accrued pension expense 84,577 (39,952)
Net cash used for operating activities $(1,364,303) $(3,215,305)
INVESTING ACTIVITIES:
Acquisition of property, plant and equipment $(1,526,409) $(2,189,338)
Proceeds from disposals of property, plant
and equipment 23,250 15,000
Payment for purchases of equity investments (132,493) (486,512)
Proceeds from disposals of equity investments 111,650 -
Decrease in short-term investments, net 397 162,476
Net cash used for investing activities $(1,523,605) $(2,498,374)
FINANCING ACTIVITIES:
Proceeds from bank loans $ 2,839,453 $ 6,422,073
Cash dividends paid (1,610,783) (1,610,783)
Net cash provided by financing activities $ 1,228,670 $ 4,811,290
Net decrease in cash and cash equivalents $(1,659,238) $ (902,389)
CASH AND CASH EQUIVALENTS, beginning of year 3,909,215 3,224,861
CASH AND CASH EQUIVALENTS, end of period $ 2,249,977 $ 2,322,472
Interest paid $ 242,802 $ 182,250
Income taxes paid $ 26,800 $(232,794)
See notes to condensed consolidated financial statements
THE MONARCH CEMENT COMPANY AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 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
first quarter 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 March 31, 2003 and 2002 and
December 31, 2002 (in thousands):
Three Months Ended
3/31/03 3/31/02
Sales to Unaffiliated Customers
Industry: Segment A $ 6,253 $ 7,179
Segment B 12,716 15,693
Intersegment Sales
Industry: Segment A 1,844 2,280
Segment B - -
Operating Loss
Industry: Segment A (276) (119)
Segment B (1,602) (796)
Capital Expenditures
Industry: Segment A 269 799
Segment B 1,257 1,390
Balance as of
3/31/03 12/31/02
Identifiable Assets
Industry: Segment A $78,505 $76,369
Segment B 35,929 37,316
Corporate Assets 18,642 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
customers. 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
$1,526,000 during the first three months of 2003. These funds were
primarily used to upgrade equipment in the ready-mixed concrete and sundry
building materials segment.
6. 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. At March 31, 2003 and 2002, there was $6,687,798 and
$5,000,000, respectively, borrowed against this line. The line contains a
financial covenant related to net worth which the Company was in compliance
with at March 31, 2003. Interest on the line of credit varies with the
JP Morgan Chase prime rate less .75% and is payable quarterly. Monarch's
interest rate on March 31, 2003 and 2002 was 3.5%.
Long-term debt consists of:
3/31/03 12/31/02
Note payable, bank (a) $24,199,731 $25,000,000
Other 1,485,012 1,540,139
$25,684,743 $26,540,139
Less current maturities 3,278,080 3,255,476
$22,406,663 $23,284,663
(a) Due December 31, 2005; payable $995,000 quarterly
including interest; interest computed based on
JP Morgan Chase prime rate less 1.25%; subject to
a financial covenant related to net worth which the
Company was in compliance with at March 31, 2003.
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 three 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 with which the
Company was in compliance at the end of the first quarter of 2003. As of
March 31, 2003, we had borrowed $24,199,731 on the advancing term loan and
$6,687,798 on the line of credit leaving a balance available on the line of
credit of $3,312,202. The average daily interest rate we paid during the
first quarter of 2003 was 3.0% on the advancing term loan and 3.5% on the line
of credit. At the end of the quarter, 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 March 31, 2003 were $133,076,013, a decrease of
$430,251 since December 31, 2002. Decreases in cash and receivables were
substantially offset by an increase in inventories, resulting in a slight
decrease in total assets. The variations are common during the first quarter
of the year due to the seasonality of our business (see Seasonality below).
Indebtedness increased $2,784,326 during the first three months of 2003
due primarily to increasing inventories and capital expenditures.
Stockholders' investment decreased 1.7% during the first three months of
2003 primarily due to the net loss. Basic losses were $(.31) 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 quarter 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 coal firing equipment for this project;
however, we do not anticipate major expenditures towards its installation
until later 2003 or 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 three months ended March 31, 2003,
decreased by $3,902,201 when compared to the three months ended March 31,
2002. Sales of cement were lower by $925,638, while sales of ready-mixed
concrete and sundry building materials were lower by $2,976,563. During the
first quarter of 2003, wet weather slowed construction projects, decreasing
sales of both cement and ready-mixed concrete. In contrast, mild, dry weather
our market area during the first quarter of 2002 allowed construction projects
to proceed.
The gross profit rate for the three months ended March 31, 2003 was 5.3%
versus 7.3% for the three months ended March 31, 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 by 11.5% during
the first quarter of 2003 compared to the first quarter of 2002. Overall
increases in insurance and payroll costs contributed to this increase,
although no single factor increased materially.
Interest expense increased $81,467 for the first three months of 2003 as
compared to the first three months of 2002 due to the increase in bank loans
outstanding. The Company utilized these loans for capital improvements.
Other, net decreased $324,981 during the first quarter of 2003 as
compared to the first quarter of 2002 primarily due to an increase in
subsidiary losses allocated to minority interest and an increase in
miscellaneous sales.
The effective tax rates for the three months ended March 31, 2003 and
2002 were 31.3% and 29.5%, 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
loss.
The Financial Accounting Standards Board (FASB) recently issued
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others,"
effective for guarantees issued or modified after December 31, 2002 and
Statement of Financial Accounting Standards (SFAS) No. 143, "Accounting for
Asset Retirement Obligations," effective for the 2003 calendar year. The
Company has evaluated the effects of these standards and they are not expected
to have a material effect on the Company's financial position or results of
operations.
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 market. 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 $8,490,000 of equity securities as of March 31, 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 $510,000 effect on comprehensive income.
The Company also has $30,887,528 of bank loans as of March 31, 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.
DISCLOSURE CONTROLS AND PROCEDURES/INTERNAL CONTROLS
Based on an evaluation of disclosure controls and procedures for the
period ended March 31, 2003 conducted by our President and Chief Financial
Officer, we conclude that our disclosure controls and procedures are
effective. The President and Chief Financial Officer conducted this
evaluation on April 15, 2003.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
99.1 Certificate of the Chief Executive Officer of the Company
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 Certificate of the Chief Financial Officer of the Company
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K. There were no reports required to be filed
on Form 8-K during the quarter for which this report is being
filed (January 1, 2003 to March 31, 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 May 14, 2003 /s/ Walter H. Wulf, Jr.
Walter H. Wulf, Jr.
President and
Chairman of the Board
Date May 14, 2003 /s/ Lyndell G. Mosley
Lyndell G. Mosley, CPA
Chief Financial Officer and
Assistant Secretary-Treasurer
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 quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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
quarterly 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-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures 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 quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, 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 in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: May 14, 2003
/s/ Walter H. Wulf, Jr.
Walter H. Wulf, Jr.
President and Chairman of the Board
I, Lyndell G. Mosley, certify that:
1. I have reviewed this quarterly report on Form 10-Q of The Monarch Cement
Company;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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
quarterly 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-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures 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 quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, 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 in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: May 14, 2003
/s/ Lyndell G. Mosley
Lyndell G. Mosley, CPA
Chief Financial Officer and
Assistant Secretary-Treasurer
EXHIBIT INDEX
Exhibit
Number Description
99.1 Section 906 Certificate of the Chief Executive
Officer dated May, 14, 2003, which is
accompanying this Quarterly Report on
Form 10-Q for the fiscal quarter ended
March 31, 2003 and is not treated as filed
in reliance on the Securities and Exchange
Commission's Interim Guidance Regarding
Filing Procedures.
99.2 Section 906 Certificate of the Chief Financial
Officer dated May, 14, 2003, which is
accompanying this Quarterly Report on
Form 10-Q for the fiscal quarter ended
March 31, 2003 and is not treated as filed
in reliance on the Securities and Exchange
Commission's Interim Guidance Regarding
Filing Procedures.