LIQUIDITY

          The Company considers all liquid investments with original maturities of three months or less to be cash equivalents.  At March 31, 2009 and December 31, 2008, cash equivalents consisted primarily of money market investments and repurchase agreements with various banks which are not guaranteed by the FDIC.  The financial institutions holding the Company's cash accounts are participating in the FDIC's Transaction Account Guarantee Program.  Under that program, through December 31, 2009, all noninterest-bearing transaction accounts are fully guaranteed by the FDIC for the entire amount in the account.

          The Company has $2.1 million of short-term investments in Bank of Oklahoma, N.A. certificates of deposit which mature in less than one year.  Effective October 3, 2008, the FDIC's insurance limits increased to $250,000.  The increase in federally insured limits is currently set to expire December 31, 2009.  At March 31, 2009, the Company's account exceeded federally insured limits by approximately $1.9 million.

We are able to meet our cash needs primarily from a combination of operations and bank loans.

          Net cash used for operating activities totaled $2.9 million for the three months ended March 31, 2009, an increase in the use of cash of $.2 million as compared with the three months ended March 31, 2008.  Net loss increased $.8 million from 2008 to 2009 primarily due to the decline in the gross profit margin that resulted from increased repairs and maintenance costs in our Cement Business and fixed production costs being allocated over lower volumes in our Ready-Mixed Concrete Business as discussed under "Overview" above. Receivables increased more in the first quarter of 2008 than 2009 due primarily to a greater increase in March sales in 2008 over December sales in 2007 compared to the increase in March sales in 2009 over December sales in 2008.  While the Company reduced production in the first quarter of 2008 and 2009, inventories increased more in the first quarter of 2009 than the first quarter of 2008.  Finished cement inventory increased $2.2 million and work-in-process declined $.6 million during the first quarter of 2009 while finished cement increased $.4 million and work-in-process declined $1.2 million during the first quarter of 2008.  More cash was provided in the first quarter of 2009 than 2008 as a result of a $1.6 million increase in payables during the first quarter of 2009 as compared to a slight decline in 2008. Accrued pension expense increased by $.5 million more in the first quarter of 2009 as compared to the first quarter of 2008 due to a decline in plan asset values as of the end of 2008.

          Net cash used for investing activities totaled $4.2 million in the first quarter of 2009 while $3.3 million was used in the first quarter of 2008.  The $.9 million increase in net cash used for investing activities from the first quarter of 2008 to the first quarter of 2009 is principally due to an increase in the acquisition of property, plant and equipment.  The increase in the cash used to purchase equity investments was essentially offset by the increase in the proceeds from the disposal of equity investments. Cash used to purchase equity investments was partially provided from proceeds of the sale of equity investments in 2009 with the net result essentially the same cash usage as 2008.  Proceeds from disposals totaled $.6 million in 2009 while no investments were disposed of in 2008.  

          Net cash provided by financing activities totaled $5.9 million and $4.0 million for 2009 and 2008, respectively, and were primarily the result of bank loan and revolving line of credit balances.  These loans were used to cover increases in receivables, inventories, and equity investments plus approximately $2.3 million in 2009 for cash expenditures for property, plant and equipment.

          In December 2008, Monarch renewed and modified the loan agreement with its current lender, Bank of Oklahoma, N.A., under similar terms as the prior agreement. Monarch's current unsecured credit commitment consists of a $25.0 million term loan maturing December 31, 2014 and a $15.0 million line of credit maturing December 31, 2009. The term loan bears a floating interest rate based on the lender's National Prime rate less .75% with a 3.00% interest rate minimum or floor. The line of credit bears a floating interest rate based on the lender's National Prime rate less 1.25% with a 2.50% interest rate minimum or floor. The loan agreement contains a financial covenant related to net worth which the Company was in compliance with at year end.  Prior to the renewal, interest on the Company's term loan was variable and was based on the JP Morgan Chase prime rate less .75%.  Interest on the line of credit varied with the lender's National Prime rate less 1.25% for 2008.  As of March 31, 2009, we had borrowed $16.6 million on the term loan and $8.5 million on the line of credit leaving a balance available on the line of credit of $6.5 million.  The annual weighted average interest rate we paid on the term loan during the first quarter of 2009 and 2008 was 3.25% and 5.60%, respectively.  The annual weighted average interest rate we paid on the line of credit during the first quarter of 2009 and 2008 was 2.75% and 5.10%, respectively.  At the end of the quarter, the applicable interest rate was 3.25% on the term loan and 2.75% on the line of credit. The term loan was used to help finance the expansion project at our cement manufacturing facility.  The line of credit was used to cover operating expenses primarily during the first quarter of the year due to the seasonality of our business and for capital expenditures. Our Board of Directors has given management the authority to borrow an additional $10 million, for a maximum of $50 million.  We have not discussed additional financing with any banks or other financial institutions; therefore, no assurances can be given that we will be able to obtain this additional borrowing on favorable terms, if at all.

          The Company has projects in the planning and design phases in addition to projects already in progress. For discussion of these projects, see paragraph two under "Capital Resources" below. We anticipate capital expenditures for 2009 to be higher than 2008 levels, but we do not anticipate the need for additional bank financing other than that available under the existing line of credit.

          For several years the Company has paid a $.20 per share dividend in January, March, June and September. Beginning with the April 2006 Board of Directors meeting, the Board elected to increase these dividends to $.21 per share; at the April 2007 Board of Directors meeting, the Board increased the dividend to $.22 per share; and at the April 2008 Board of Directors meeting, the Board increased the dividend to $.23 per share.  Under the terms and conditions of our loan agreement, the Company is required to maintain a tangible net worth of $90 million and an adjusted tangible net worth, which is tangible net worth before other comprehensive income, of $95 million.  The Company was in compliance with these requirements at the end of the first quarter of 2009.  Although dividends are declared at the Board's discretion and could be impacted by the minimum net worth requirements of the Company's loan agreement, we project future earnings will support the continued payment of dividends at the current level.

          The Company has been required to make a pension contribution each of the past two years.  In 2008 and 2007, the Company contributed approximately $1.4 million and $.7 million, respectively, to the pension fund. No estimates of required pension payments have been asked for or made beyond 2009.  The decline in the bond and stock markets in 2008 significantly reduced the value of our pension funds at December 31, 2008.  Based on the pension laws currently in effect, the resulting increase in minimum funding requirements could cause a negative impact to our liquidity.

FINANCIAL CONDITION

          Total assets as of March 31, 2009 were $180.1 million, an increase of $5.3 million since December 31, 2008.  Increases in receivables and finished cement inventory are common during the first quarter of the year due to the seasonality of our business (see "Seasonality" below). Receivables and finished cement inventory increased approximately $.7 million and $2.2 million, respectively.  Fuel, gypsum, paper sacks and other inventory increased $.9 million primarily due to purchases of coal and petroleum coke exceeding amounts consumed in the production process.  Operating and maintenance supplies inventory increased $.3 million due to purchases of specialized repair supplies related to the recently completed construction in the production facilities.  Management continually evaluates the lead time to obtain repair parts which are critical to its cement operations in determining which parts to keep in inventory.  Work-in-process decreased $.6 million primarily due to the decision to reduce production as discussed under "Overview" above.  Prepaid expenses increased by $.5 million primarily due to insurance deposits.  Deferred income taxes increased primarily due to decreases in unrealized holding gains related to equity investments.  Investments increased despite an unrealized loss of approximately $.6 million due to the purchase of $1.9 million of equity investments, net of disposals.

          Indebtedness increased $7.7 million during the first three months of 2009 primarily due to funding the increases in receivables, inventories, and equity investments just discussed plus approximately $2.3 million for cash expenditures for property, plant and equipment. 

          Accounts payable increased by $1.6 million since December 31, 2008 primarily due to acquisitions of equipment related to the fuel handling system project. Cash dividends liability, which is included in accrued liabilities, decreased by $1.9 million from December 31, 2008 to March 31, 2009 due to the timing of when dividends are declared.  Accumulated other comprehensive loss increased due primarily to a $.6 million net unrealized holding loss.

CAPITAL RESOURCES

          The Company regularly invests in miscellaneous equipment and facility improvements in both the Cement Business and Ready-Mixed Concrete Business.  Capital expenditures during the first quarter of 2009 included expenditures on a new fuel handling system. We also invested in routine equipment purchases during the first quarter of 2009, primarily in the Ready-Mixed Concrete Business. During the first quarter of 2009, cash expenditures for property, plant and equipment totaled approximately $2.3 million, excluding the amounts that are included in accounts payable. 

          The Company is currently installing a fuel handling system which is expected to be completed in the third quarter of 2009 at a cost of approximately $4.0 million.  Projects in the planning and design phases include an overland conveyor system to improve efficiencies in moving raw materials.  This conveyor system and projects related thereto are expected to cost approximately $15.0 million to $25.0 million depending on the exact components of the project undertaken and the volatility of certain material costs, particularly steel. Management has the discretion to postpone components of the project and the discretion to undertake part or the entire project. The overland conveyor system and projects related to it are estimated to take twenty-four to thirty-six months to complete after the first purchase order is issued, which is expected to occur in 2009.  The Company also plans to invest in other miscellaneous equipment and facility improvements in both the Cement Business and Ready-Mixed Concrete Business in 2009.  These expenditures are expected to reach approximately $12.0 million during 2009 and will be funded with a mixture of cash from operations and temporary bank loans. We do not anticipate the need for additional bank financing beyond the amount available through our existing revolving line of credit.

MARKET RISK   

          Market risks relating to the Company's operations result primarily from changes in demand for our products.  Construction activity, particularly in the residential market, has been adversely impacted by the global financial crisis even though interest rates are at historically low levels.  A continuation of the financial crisis, including a scarcity of credit, or a significant increase in interest rates could lead to a further 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, concrete products 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, and to a lesser extent natural gas, in its kilns.  Increases above the rate of inflation in the cost of these solid fuels, natural gas, or in the electricity required to operate our cement manufacturing equipment could adversely affect our operating profits. 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.

ENVIRONMENTAL REGULATIONS

          Regulation of carbon dioxide emissions are currently being discussed by both state and federal legislative bodies and regulators.  As part of the chemical process involved in the production of portland cement, carbon dioxide is driven off of raw materials.  Management is studying practices and technology which may reduce or sequester carbon dioxide emissions.  The effect of environmental regulations, and/or noncompliance thereof, may increase taxes, penalties, and the cost of production, as well as require additional capital expenditures for equipment.

          On April 21, 2009 the Environmental Protection Agency (EPA) proposed modifications to National Emission Standard for Hazardous Air Pollutants (NESHAP) which would set limits for certain emissions from portland cement kilns. Under the proposal the limits would not be fully implemented until 2013.  Management is reviewing this proposal and the best available technology which may achieve compliance if the final rule is promulgated in its present form.  Additional capital expenditures may be required to attain the proposed limits.

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.

Item 3.       Quantitative and Qualitative Disclosures about Market Risk

          The Company invests in equity investments which are subject to market fluctuations.  The Company had $13.6 million of equity securities, primarily of publicly traded entities, as of March 31, 2009.  The aggregate amount of securities carried at cost, for which the Company has not elected the fair value option, was $1.8 million as of March 31, 2009.  The remaining $11.8 million in equity investments, which are stated at fair market value, are not hedged and are exposed to the risk of changing market prices.  The Company classifies all securities as "available-for-sale" for accounting purposes and marks them to market on the balance sheet at the end of each period unless they are securities for which the Company has not elected the fair value option.  Securities carried at cost are adjusted for impairment, if conditions warrant.  Management estimates that its publicly traded 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 $.8 million effect on comprehensive income.  At March 31, 2009, the Company evaluated all of its equity investments for impairment. The results of those evaluations are discussed in Note 9 of Notes to the Condensed Consolidated Financial Statements.

          The Company also has $25.1 million of bank loans as of March 31, 2009.  Interest rates on the Company's term loan and line of credit are variable, subject to interest rate minimums or floors, and are based on the lender's National Prime rate less .75% and lender's National Prime rate less 1.25%, respectively.

Item 4.         Controls and Procedures

          The Company maintains disclosure controls and procedures (as defined in Rules 13a-5(e) and 15d-15(e) under the Securities Exchange Act of 1934) that are designed to ensure that information required to be disclosed in the Company's reports under the  Exchange Act  is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to the Company's management, including its President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.  Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

          As of the end of the period covered by this report, an evaluation was carried out by the Company's management, including its President and Chairman of the Board of Directors and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-5(e) or 15d-15(e) under the Exchange Act).  Based upon that evaluation, the Company's President and Chairman of the Board of Directors and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report.

          There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2009 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART  II.   OTHER INFORMATION

Item 1.       Legal Proceedings

          The Company and Tulsa Dynaspan, Inc. (TDI) a subsidiary of the Company, were defendants in a case brought by David Markle, Richard Evilsizer, and five other named plaintiffs, filed in the District Court of Tulsa County, Oklahoma, on December 29, 2004 and amended on January 19, 2005, January 6, 2006, August 18, 2006, and January 12, 2007.  Prior to the August 18, 2006 amendment, Plaintiffs dismissed claims they had previously asserted for defamation and various business torts, derivative claims brought on behalf of the Company, and claims to ownership of an invention relating to parking garage construction.  Markle and Evilsizer remained as Plaintiffs; the five other original Plaintiffs remained in the action only as counterclaim defendants.  Plaintiffs sought an award of actual and exemplary damages from the Company, one of its directors and four of TDI's directors for alleged breach of fiduciary duties owed to TDI, based upon derivative and breach of contract claims.  The Company asserted a counterclaim based upon breach of contract against Markle and TDI asserted counterclaims based upon breach of fiduciary duty, misappropriation, violations of the Computer Fraud and Abuse Act and the Oklahoma Trade Secrets Act, unjust enrichment, and various business torts against all of the original plaintiffs. Plaintiffs also sought an order from the Court that the Company purchase Plaintiffs' shares of TDI stock for fair value.  On April 10, 2007, the Court heard arguments on various motions and subsequently entered the following orders: Monarch and the individual directors' motion for summary judgment dismissing all of Plaintiffs' claims was granted; Monarch's motion for summary judgment on its pre-termination competition claim against Markle was granted; TDI's motion for summary judgment against Plaintiffs for unjust enrichment and breach of fiduciary duty was granted; Markle's motion for partial summary judgment on the non-compete agreement executed by the parties was denied. Additional hearings to establish TDI's and Monarch's damages were necessary; all of Plaintiffs' claims were dismissed.  Because of the failure of certain plaintiffs to participate in a pretrial conference the proceedings were bifurcated.  Markle and Evilsizer later filed bankruptcy.  Complaints to collect damages from Markle and Evilsizer were filed in the Bankruptcy courts.  Monarch claims against Markle in bankruptcy were dismissed as duplicative; TDI's claim against Markle and Monarch's claim against Evilsizer remained pending.  A hearing on actual and punitive damages against Parking Builders, GBS and ENCO was held on February 1, 2008.  On February 29, 2008, TDI was awarded $3,117,574 in actual damages and an additional $3,117,574 in punitive damages against GBS and ENCO; TDI was awarded $1,614,720 in actual damages and an additional $1,614,720 in punitive damages against Parking Builders.  No assurances can be given as to the collectability of these damage awards.  TDI has settled its claims against Martin and Bobbitt. A judgment has been entered against Markle and in favor of TDI in the amount of $3.0 million. No assurances can be given as to the collectability of the judgment. TDI has agreed to accept a lesser amount in full satisfaction provided Markle pays cash by a date certain.  The action against Evilsizer remains pending.

Item 6.       Exhibits

31.1  Certificate of the President and Chairman of the Board pursuant to Section 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

31.2  Certificate of the Chief Financial Officer pursuant to Section 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

32.1  18 U.S.C. Section 1350 Certificate of the President and Chairman of the Board dated May 11, 2009.

32.2  18 U.S.C. Section 1350 Certificate of the Chief Financial Officer dated May 11, 2009.

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 11, 2009                                             /s/ Walter H. Wulf, Jr.             

Walter H. Wulf, Jr.
                                                                                President and
                                                                                Chairman of the Board

Date      May 11, 2009                                             /s/ Debra P. Roe                     

Debra P. Roe, CPA
                                                                                Chief Financial Officer and         
                                                                                Assistant Secretary‑Treasurer

EXHIBIT INDEX

 Exhibit
 Number                                                        Description                                  

31.1                             Certificate of the President and Chairman of the
                                            Board pursuant to Section 13a-14(a)/15d-14(a)
                                            of the Securities Exchange Act of 1934.

31.2                            Certificate of the Chief Financial Officer pursuant
                                            to Section 13a-14(a)/15d-14(a) of the
                                            Securities Exchange Act of 1934.

32.1                           18 U.S.C. Section 1350 Certificate of the President
                                            and Chairman of the Board dated May 11, 2009.

32.2                           18 U.S.C. Section 1350 Certificate of the
                                            Chief Financial Officer dated May 11, 2009.