Monarch Cement : 2023 – Third Quarter Report

Disclosure Statement Pursuant to the Pink Basic Disclosure Guidelines

The Monarch Cement Company

A Kansas Corporation

P.O Box 1000, Humboldt, Kansas

________________________________

620-473-2222

www.monarchcement.com

[e-mail]

3241 - Cement, Hydraulic

3273 - Ready-Mixed Concrete

Quarterly Report

For the Period Ending: September 30, 2023

Outstanding Shares

The number of shares outstanding of our Common Stock was:

2,561,149 of our Common Stock as of September 30, 2023 1,128,618 of our Class B Common Stock as of September 30, 2023 2,578,451 of our Common Stock as of December 31, 2022 1,130,425 of our Class B Common Stock as of December 31, 2022

Shell Status

Indicate by check mark whether the company is a shell company (as defined in Rule 405 of the Securities Act of 1933 and Rule 12b-2 of the Exchange Act of 1934):

Yes:

No:

Indicate by check mark whether the company's shell status has changed since the previous reporting period:

Yes:

No:

Change in Control

Indicate by check mark whether a Change in Control of the company has occurred over this reporting period:

Yes:

No:

1) Name and address(es) of the issuer and its predecessors (if any)

In answering this item, please also provide any names used by predecessor entities and the dates of the name changes.

The Monarch Cement Company

The state of incorporation or registration of the issuer and of each of its predecessors (if any) during the past five years; Please also include the issuer's current standing in its state of incorporation (e.g. active, default, inactive):

Monarch was organized as a corporation under the laws of the State of Kansas on July 29, 1913 and is currently active.

Describe any trading suspension orders issued by the SEC concerning the issuer or its predecessors since inception:

None

List any stock split, stock dividend, recapitalization, merger, acquisition, spin-off, or reorganization either currently anticipated or that occurred within the past 12 months:

The Company issued 15,239 of Capital Stock in August 2022 as part of the consideration paid by the Company for the acquisition of American Concrete Company.

The address(es) of the issuer's principal executive office:

The Monarch Cement Company

449 1200 Street

P.O. Box 1000

Humboldt, KS 66748

The address(es) of the issuer's principal place of business:

Check box if principal executive office and principal place of business are the same address: ☒

Has the issuer or any of its predecessors been in bankruptcy, receivership, or any similar proceeding in the past five years?

Yes: ☐	No: ☒
2) Security Information
Transfer Agent
Name:	The Monarch Cement Company
Address:	449 1200 Street
	P.O. Box 1000
	Humboldt, KS 66748-0900
Phone:	620-473-2222
Email:	[e-mail]

Is the Transfer Agent registered under the Exchange Act?Yes:	No:
Publicly Quoted or Traded Securities:
Trading symbol:	MCEM
Exact title and class of securities outstanding:	Capital Stock
CUSIP:	609031307
Par or stated value:	$2.50
Total shares authorized:	10,000,000 as of September 30, 2023
Total shares outstanding:	2,561,149 as of September 30, 2023
Trading symbol:	MCEM
Exact title and class of securities outstanding:	Class B Capital Stock
CUSIP:	609031406
Par or stated value:	$2.50
Total shares authorized:	10,000,000 as of September 30, 2023
Total shares outstanding:	1,128,618 as of September 30, 2023
Number of shares in the Public Float:	3,186,829 as of September 30, 2023
Total number of shareholders of record:	325 as of September 30, 2023

Security Description:

1. For common equity, describe any dividend, voting and preemption rights. 

Each issued and outstanding share of our Capital Stock as of the close of business on the record date is entitled to one vote on each matter submitted to a vote at the annual meeting, and each issued and outstanding share of our Class B Capital Stock as of the close of business on the record date is entitled to ten votes on each matter submitted to a vote at the annual meeting.

We pay the same dividend on both Capital Stock and Class B Capital Stock.

2. For preferred stock, describe the dividend, voting, conversion, and liquidation rights as well as redemption or sinking fund provisions. 

None.

3. Describe any other material rights of common or preferred stockholders. 

Class B shares have restrictions or transferability, but they can always be converted into Capital Stock.

4. Describe any material modifications to rights of holders of the company's securities that have occurred over the reporting period covered by this report. 

None.

3) Issuance History

A. Changes to the Number of Outstanding Shares

Indicate by check mark whether there were any changes to the number of outstanding shares within the past two completed fiscal years:

No: ☐

Yes: (If yes, you must complete the table below)

Pursuant to the provisions of Monarch's Articles of Incorporation governing the conversion of its Class B Capital Stock into Capital Stock a total of 1,057 shares of Monarch's Capital Stock were issued in the first nine-month ended September 30, 2023, upon conversion of an equal number of shares of Monarch's Class B Capital Stock. The following changes occurred to shares during the past two years as indicated below:

Number of	Opening Balance:
Shares
outstanding as of	Capital: 2,609,104
01/01/2021	Class B: 1,187,725
Date of	Transaction	Number of	Class of Securities	Value	Were the	Individual/	Reason for	Restric	Exemptio
Transaction	type (e.g. new	Shares		of	shares	Entity	share issuance	ted or	n or
	issuance,	Issued (or		shares	issued at a	Shares were	(e.g. for cash or	Unrestr	Registrati
	cancellation,	cancelled)		issued	discount to	issued to	debt conversion)	icted	on Type?
	shares returned			($/per	market	(entities	OR Nature of	as of
	to treasury)			share)	price at the	must have	Services	this
				at	time of	individual	Provided (if	filing?
				Issuan	issuance?	with voting /	applicable)
				ce	(Yes/No)	investment
						control
						disclosed).
1/28/21	Conversion	670	Class B to Capital
2/5/21	Conversion	600	Class B to Capital
4/1/21	Conversion	25	Class B to Capital
5/19/21	Retirement	34,610	Class B
6/15/21	Conversion	13,971	Class B to Capital
12/15/21	Conversion	200	Class B to Capital
12/21/21	Retirement	260	Capital
1/17/22	Conversion	850	Class B to Capital
8/1/22	Issuance	15,239	Capital
9/16/22	Retirement	2,383	Capital
9/19/22	Retirement	3,753	Capital
9/20/22	Conversion	5,374	Class B to Capital

10/7/22	Conversion	1,000	Class B to Capital
12/12/22	Retirement	58,186	Capital
12/19/22	Retirement	4,000	Capital
2/23/23	Conversion	412	Class B to Capital
6/8/23	Conversion	645	Class B to Capital
6/23/23	Retirement	14,999	Capital
8/28/23	Retirement	2,670	Capital
9/8/23	Retirement	750	Class B
9/22/23	Retirement	690	Capital
Shares	Ending Balance:
Outstanding on
09/30/2023:	Capital: 2,561,149

Class B: 1,128,618

The Company received no payment in connection with the issuances of such shares. No underwriters were involved with the issuance of such shares and no commissions were paid in connection with such issuances. There was no advertisement or general solicitation made in connection with the issuance of such shares. Except as described above, Monarch did not issue or sell any shares of its Capital Stock or Class B Capital Stock during the nine months ended September 30, 2023.

B. Promissory and Convertible Notes

The Company has a current credit agreement with BOKF, NA dba Bank of Oklahoma which provides for a $15.0 million revolving note maturing on December 31, 2024; the previous agreement matured on December 31, 2021. As of September 30, 2023 and December 31, 2022, there was nothing borrowed against the revolving loan.

Indicate by check mark whether there are any outstanding promissory, convertible notes, convertible debentures, or any other debt instruments that may be converted into a class of the issuer's equity securities:

No:

Yes: ☐ (If yes, you must complete the table below)

Date of

Outstanding

Principal

Interest

Maturity

Conversion Terms (e.g.

Name of Noteholder

Reason for

Note

Balance ($)

Amount

Accrued

Date

pricing mechanism for

(entities must have

Issuance (e.g.

Issuance

at

($)

determining conversion of

individual with voting

Loan, Services,

Issuance

instrument to shares)

/ investment control

etc.)

($)

disclosed).

4) Issuer's Business, Products and Services

1. Summarize the issuer's business operations

The Monarch Cement Company (Monarch) manufactures and sells portland cement. The manufacture of portland cement by Monarch involves the quarrying of clay and limestone and the crushing, drying and blending of these raw materials into the proper chemical ratio. The raw materials are then heated in kilns to 2800º Fahrenheit at which time chemical reactions occur forming a new compound called clinker. After the addition of a small amount of gypsum, the clinker is ground into a very fine powder that is known as portland cement. The term "portland cement" is not a brand name but is a term that distinguishes cement manufactured by this chemical process from natural cement, which is no longer widely used. Portland

cement is the basic material used in the production of ready-mixed concrete that is used in highway, bridge and building construction where strength and durability are primary requirements.

Subsidiaries of Monarch (which together with Monarch are referred to herein as the "Company") are engaged in the ready- mixed concrete, concrete products and sundry building materials business. Ready-mixed concrete is manufactured by combining aggregates with portland cement, water and chemical admixtures in batch plants. It is then loaded into mixer trucks and mixed in transit to the construction site where it is delivered to the contractor. Concrete products primarily include pre-formed components produced by the Company that are ready for use in the construction of commercial buildings and institutional facilities.

1. List any subsidiaries, parent company, or affiliated companies.

Subsidiaries of Monarch include: American Concrete Company, Inc., Beaver Lake Concrete, Inc., Capitol Concrete Products Co., Inc., City Wide Construction Products Co., Concrete Enterprises, Inc., Concrete Materials, Inc., Dodge City Concrete, Inc., Hays Ready-Mix, Inc., Joplin Concrete Company, Inc., Kansas Sand and Concrete, Inc., Kay Concrete Materials Co., Lion's Share Insurance, Inc., Monarch Cement of Iowa, Inc., Salina Concrete Products, Inc., Springfield Ready Mix Co. and Tulsa Dynaspan, Inc. These subsidiaries are 100% owned by Monarch and can be contacted through Monarch.

1. Describe the issuers' principal products or services.

The marketing area for Monarch's products, which is limited by the relatively high cost of transporting cement, consists primarily of the State of Kansas, the State of Iowa, southeast Nebraska, western Missouri, northwest Arkansas and northern Oklahoma. Included within this area are the metropolitan markets of Des Moines, Iowa; Kansas City, Missouri; Springfield, Missouri; Wichita, Kansas; Omaha, Nebraska; Lincoln, Nebraska; Fayetteville, Arkansas and Tulsa, Oklahoma. Sales of cement are made primarily to contractors, ready-mixed concrete plants, concrete products plants, building materials dealers and governmental agencies. Monarch cement is delivered either in bulk or in paper bags and is sold under the "MONARCH" brand name. The cement is distributed both by truck and rail, either common or private carrier.

Subsidiaries of Monarch sell ready-mixed concrete, concrete products and sundry building materials in Monarch's primary market.

5) Issuer's Facilities

The Company's corporate office and cement plant, including equipment and raw materials, are located at Humboldt, Kansas, approximately 110 miles southwest of Kansas City, Missouri. The Company owns approximately 5,000 acres of land on which the Humboldt plant, offices and all essential raw materials for the cement operations are located. Construction completed in 2006 increased our cement plant's capacity allowing us to produce in excess of one million tons of cement per year. Producing at that level, raw material reserves are estimated to be sufficient to maintain operations at this plant for more than 50 years, although not all reserves are currently accessible under existing governmental permits and approvals. The Company believes that this plant and equipment are suitable and adequate for its current level of operations and provides for increases in market demand.

The Company also owns approximately 250 acres of land in Des Moines, Iowa on which it operates a cement terminal. The Company transfers cement produced in Humboldt, Kansas to this terminal for distribution to Iowa customers. The Company also owns a rock quarry located near Earlham, Iowa, approximately 30 miles west of Des Moines, Iowa. Approximately 353 acres of this 400 acre tract have been quarried and the Company has contracted with a third party to quarry and sell the remaining rock. This quarry operation does not have a material effect on the Company's overall operations.

The Company owns various companies which sell ready-mixed concrete, concrete products and sundry building materials within the Humboldt cement plant's primary market. Various equipment and facility improvements in this line of business ensure these plants are suitable and adequate for their current level of operations and provide for increases in market demand. No single subsidiary's physical property is materially significant to the Company.

There are no material encumbrances on our properties.

6) Officers, Directors, and Control Persons

Name of	Affiliation with	Residential Address (City /	Number	Share	Ownership	Names of
Officer/Director and	Company (e.g.	State Only)	of shares	type/class	Percentage of	control
Control Person	Officer/Director/Owner		owned		Class	person(s)
	of more than 5%)				Outstanding	if a
						corporate
						entity

Walter H. Wulf, Jr.		Officer/Director	Humboldt, KS	169,452	Capital	6.62%
				195,525	Class B	17.32%
Kent A. Webber		Officer/Director	Chanute, KS	4,300	Capital	*
Robert M. Kissick		Officer/Director	Leawood, KS	13,982	Capital	*
				39,903	Class B	3.54%
Tony D. Kasten		Officer	Chanute, KS	110	Capital	*
Lisa J. Fontaine		Officer	Iola, KS	2,500	Capital	*
Kenneth G. Miller		Officer	Humboldt, KS	2,200	Capital	*
Douglas W.		Officer	Chanute, KS	700	Capital	*
Sommers
Mark A. Callaway		Director	Wichita, KS	5,993	Class B	*
David L. Deffner		Director	Gulf Shores, AL	11,863	Class B	1.05%
Gayle C. McMillen		Director	Salina, KS	34,410	Class B	3.05%
Byron J. Radcliff		Director	Steamboat Springs,	4,250	Capital	*
			CO	1,000	Class B	*
Robert K. Radcliff		Director	Chicago, IL	4,250	Capital	*
Steve W. Sloan		Director	Pittsburg, KS	2,000	Capital	*
Michael R.		Director	Kent, WA	1,600	Capital	*
Wachter				600	Class B	*
Walter H. Wulf, III		Director	Birmingham, MI	3,800	Capital	*
				4,500	Class B	*
Paula D. Radcliff		Owner of more	Dexter, KS	199,760	Capital	7.80%
		than 5%		211,960	Class B	18.78%
*Less than one percent.

7) Legal/Disciplinary History

1. Please identify whether any of the persons listed above have, in the past 10 years, been the subject of:
2. 1. A conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses);
      None
   2. The entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person's involvement in any type of business, securities, commodities, or banking activities;
      None
   3. A finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of

federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or

None

1. 4. The entry of an order by a self-regulatoryorganization that permanently or temporarily barred, suspended, or otherwise limited such person's involvement in any type of business or securities activities.

   None

2. Describe briefly any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the issuer or any of its subsidiaries is a party or of which any of their property is the subject. Include the name of the court or agency in which the proceedings are pending, the date instituted, the principal parties thereto, a description of the factual basis alleged to underlie the proceeding and the relief sought. Include similar information as to any such proceedings known to be contemplated by governmental authorities.

None

8) Third Party Service Providers

Securities Counsel
Firm:	Stinson LLP
Address 1:	1201 Walnut Street, Suite 2900
Address 2:	Kansas City, MO 64106-2150
Accountant or Auditor
Firm:	Grant Thornton, LLP
Address 1:	1201 Walnut Street, Suite 2200
Address 2:	Kansas City, MO 64106
Phone:	[phone]
Investor Relations Consultant
Firm:	Stinson LLP
Address 1:	1201 Walnut Street, Suite 2900
Address 2:	Kansas City, MO 64106-2150

9) Financial Statements

1. The following financial statements were prepared in accordance with:
   U.S. GAAP
   IFRS
2. The financial statements for this reporting period were prepared by (name of individual):

Name:	Tony Kasten
Title:	Chief Financial Officer, Sec./Tres.
Relationship to Issuer:	Officer

Describe the qualifications of the person or persons who prepared the financial statements: Mr. Kasten is a CPA with over 20 years of experience working with complex consolidated financial statements. He has served the company as Chief Financial Officer since 2019 and has a B.B.A in Finance and an M.B.A. with an emphasis in Accounting.

10) Issuer Certification

Principal Executive Officer:

I, Walter H. Wulf, Jr. certify that:

1. I have reviewed this Disclosure Statement for The Monarch Cement Company;
2. Based on my knowledge, this disclosure statement 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 disclosure statement; and
3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.

November 13, 2023

/s/ Walter H. Wulf, Jr. Chairman of the Board and Chief Executive Officer

Principal Financial Officer:

I, Tony Kasten certify that:

1. I have reviewed this Disclosure Statement for The Monarch Cement Company;
2. Based on my knowledge, this disclosure statement 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 disclosure statement; and
3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.

November 13, 2023

/s/ Tony Kasten

Chief Financial Officer Secretary-Treasurer

The Monarch Cement Company and Subsidiaries

Condensed Consolidated Balance Sheets

September 30, 2023 (Unaudited) and December 31, 2022

ASSETS		2023			2022
Current Assets:
Cash and cash equivalents (including $4,088,518 and $1,918,736 of	$	37,785,147	$	55,908,662
restricted cash at September 30, 2023 and December 31, 2022, respectively)
Receivables, less allowances of $448,500 in 2023 and
$403,500 in 2022 for doubtful accounts		29,773,077			22,528,265
Inventories
Finished cement	$	6,222,422	$	6,242,794
Work in process		6,149,295			4,696,724
Building products		3,456,898			3,090,572
Fuel, gypsum, paper sacks and other		11,398,397			9,651,643
Operating and maintenance supplies		25,844,786			23,000,051
Total inventories	$	53,071,798		$	46,681,784
Derivative financial instruments		2,305,657			1,869,466
Prepaid expenses		5,381,378			2,985,587
Total current assets	$	128,317,057	$	129,973,764
Property, Plant and Equipment, at cost, less
accumulated depreciation and depletion of $299,792,619
in 2023 and $294,443,621 in 2022		148,276,975			123,660,153
Prepaid Pension		10,008,354			9,827,053
Investments		49,008,242			42,158,560
Investments in Affiliates		15,076,431			13,643,815
Other Assets		4,922,524			4,925,833
TOTAL ASSETS	$	355,609,583		$	324,189,178
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	8,453,655	$	8,402,305
Accrued liabilities
Dividends		-			2,262,414
Compensation and benefits		3,349,990			4,221,621
Federal and state income taxes		2,083,173			549,268
Miscellaneous taxes		1,244,989			674,232
Other		2,505,154			2,557,229
Total current liabilities	$	17,636,961		$	18,667,069
Deferred Income Taxes		8,769,145			6,495,845
Accrued Compensation and benefits		211,104			211,104
Accrued Postretirement Benefits		11,155,713			11,125,917
Stockholders' Equity:
Capital stock, par value $2.50 per share, one vote per share -
Authorized 10,000,000 shares, Issued and Outstanding 2,561,149
shares at 09/30/2023 and 2,578,451 shares at 12/31/2022	$	6,402,873	$	6,446,128
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 and Outstanding
1,128,618 shares at 09/30/2023 and 1,130,425 shares at 12/31/2022		2,821,545			2,826,063
Additional paid-in-capital		4,047,123			4,047,123
Retained earnings		310,395,278			280,297,580
Accumulated other comprehensive loss		(5,830,159)			(5,927,651)
Total Stockholders' Equity	$	317,836,660		$	287,689,243
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	355,609,583		$	324,189,178

See accompanying Notes to the Consolidated Financial Statements