Document 4QQ9yB97857gM8ZZKBxGVdyMe
Cleveland WXCSS FOB AHEUU. JEBTBO
Bovoober 27# 1956
Mr. W. P. Stetzelberger
Certain things ifclcfc w; eon* up in the Annual Meetlig are outlined In tbs following. In addition# answers are given tor nest of the questions in Mr. fitetcalberger's nano of Bovenber 6# 1956.
Ibis is only * reference source in ease of questions.
Acquisitions
Ibid for tovesteiy and Becoivablea Property sod Xgaljnent
5/1/54 Mound
City
#442,690
3/22/55
#PH
#076,712
total
total Paid
# 558,940 *876,712 * 1,435,652
Sales 12 Mb. 1555
# 098,605 * 2,657,oa * 3,555,626
Bet P;ofIt 1956
# 88,072 *212,705 * 300,777
Batura on Assets
21*
Personnel Still With Tie
10 33 43
to brief*!& 195$ ve earned 21$ on $1,435,000 invested in Hound City and Zapcm.
Sale or Closing of Divisions Annual
Avg. Caeh&A&eet* Profit (toss) Profit Or Freed Up
Sales Avg. last k Trs. (loss) on Average
last 3 TVs. Operated
Sale last 5 IPs.
Hanson! 7/U6/5I CcUAQd 10/25/54 PMl MU1 8/10/54 Portland 9/18/52 Ceabridge 7A/55 Jojoba - Caatella Barytes Mines Bucaa fink 8/31/56
total
* 3,263,152 1,009,667 5,345,555 2,062,974 1,666,291 m s
* (373,225) 1393,,269068 13,771 (9,537)
,4,455,954 ___(67,338) #17,883,593
* 142,235 A #024,690
96,376 *(290,471;
2,397865,,34424?
(19,369 1,083,968
(6,542 611,110
(8,149;
54,436
50,597
4,890
11,679
*(199,351] 1.723.685
A 9,00&,239
Conservative eatlasts of additions! cash usage * peak periods over A 1.000.000
total Freed Vp - Over
$10,000,000
* Abandeenent loss in Sellls^ and General Expenses OS.
GL DO 18095
Rovefiber 27# 1956
2
Since 1951 ve have freed up over $10,000,000 uhloh v not asking ooney. Set lose on ehendonatnt and sales of $235>OQO ere less than one year's interest on aoney treed up.
Product Advertising Expense
1956 10 Mo. 1955
$k#55#7?6
* Jb Seles
2.08*
(Stage 5--Annuel Report)
Rad advertising been tbs saae per cent as last yeax~2.08*~total expense vould btve been $120,000 greater.
Mine Exploration
Total Expenditure* less Xnccae Lessi Billed Gov't.
Glldden Cost Sale of Assets
Sot Glldden Cost 1951 * 1956
Pre-Tax After Ttax
*1,329,83* *1,202,579 *577,125
jiL**>____iUtUi) X.164.775 >563.772
Bohn
Rot mentioned in Annual Report. Will probably bs asked.
Sows Plan
Original plan adopted 2/6/51# revised 2/lb/52t Gilbert suggested last year provision preventing bonus to top officers until certain dividends have been paid.
In our plan ve suit earn 12* pre-tax on bonus net capital employed before ve have any Incase on vhlch to calculate a bonus reserve of 7** la 1956 ve bad to earn over $11,000,OCX) pre-tax bafore any funds for bonus.
Zn viev of this, ve feel stockholders are veil protected.
Since 1951# vith maximum bonus available of $2,168,260, ve bate returned to profit $951#7d0# leering for bonus pay out $1,216,500. lovest nuaber of
awards Bade in any year 79# highest 212,
Gilbert also suggested submitting bonus plan to stockholders every five years. Ve do not think this necessary. Coly submit vben fundamental changes.
Stock Option
Of 100,000 shares of stock sat up for option on 2/14/52, virtually all have
been used, first option granted 6/24/52, second 12/27/5*1 and third l^/y/56.
Option prices of $35*00# $38.00 and $
.
152 people nov hold options. Ko officers or directors have sold this option stock.
GL001P096
Sovaober 27, 1956
k
Research and Development
1956 Budget
Research
{
Dovaloxnent
4
Research and DerelopBcnt
991*250
195$ Actual
1957 Budget
666,882 11,079,100
Control Lab tm.W 0 953,793
Inventories
flrtal lab
*3*170,*92 $ 3,038,188 * 3,*05,577
Inventories up in 1956 to *39,*92,2*0, compared to *33,701,460. Increase of **,791,000*
Chief increases - new Titoniun Plant *1,*00,000, Bt. Selena *670,000, Elevator operation *2,100,000, expanded Saint activities and some price increases* Overall veil in balance*
Pension Plans
Fenoioa Plan expense for funds1
ti, & Salary 0* 8* Sourly Canada Salary Canada Hourly
* 762,*2* 21,300
$ 1,117*670
Application of Funis 1956 Source*
Profit Before 3hx Depreciation Loans Increase - Set
Cash Adduction
* 13,233,718
# 16,451,000
2,870,000
6,000*000 *27,321,000
GLD01QC97
Roresfcer 27> 1956
5
Ueel
State Receivables Ret - 2serNM Inventories * Increase Gross Plant and EiUipoent Dividends Shift Xneooe ferns Paid Other Changed * Jtat
$ 1,164,000 4,791,000 16.637.000 4.591.000
0,505,000 (646,000)
increase In Selling. Adalnletratlve and General bcpenscs - febllshed *61,
Approximate figures - 10 aonths 1955 annualised*
Itcas
fetal 195$ *IS >. fetal 1955 -10 3b. fetal 1955 -12 No,
Approximate Increase
i 31,947,323 $ 24,144,643 9 28,973,000 Annualised
* 3,000,000
Increase
Stelesaan1* Salary 6 Ccma. A 2xp. (Higher
' Sales) All Other Selling A Ada. Salaries Sales Derelepaent Letters Pension * Rev Plan
Corporate Advertising All Other
$
500,000
900,000 200,000 <100,000 130,000 670,000
*3,000,000
increase in Other feccaa Published PAL
When the $48o,a87 for 10 Booths 1955 it annualised, the change to $673,148 for 3956 is ttcdnal. Priaary cta&ge la intern froa Barlua Products on
nine*
C^018098
Bovetfber 27, 1956
6
` Ccaaaenta on Typical Questions - Mr* Sfcetaalbaracr'e letter 11/8/56
Advertising * previously covered*
Ve have no treasury stock*
Bee later sheet on hank loans for financial details*
Rone of our flvs aajor divisions vas In the red. Package Products - Iterearine, Salad Products vers a loss*
Elnhurst Refinery has nov been closed.
Buena Park has been dosed.
Directors ages in 1936s
Dividends
Dwight P. Joyce P* Sprague J. P. Ruth A* D* Duncen B* V* Mtxey J* H. Weeks R* D* Horner V* 0. Phillips V* C. Lighter B. L Slaughter G H* Balsey W* D. Stslleup
Average
64 61 55 47 52 39 36 49 56 47 a
50
Cur Annual Report Shows ve paid out 56.4# in 1956 6k.sf in 1955 6t.Qt in 1954 Ck.ltf in 1953
73*9^ in 1952
With our h*vjr axjanalon progrto btfon u., do not fel so lneraeM i oov varrsatod.
Book value at 8/31/56 vas $36.19# an increase fre* $34.64 at 8/31/33*
favestnents do not Include any publloly held company.
Etenlctyees * 8/31/56 - 6,3&T--5,241 sale, 1,146 fettle*
Stockholders - 8/31/56 - T&fcsl 20,758*
Individuals Ihstltutio&s Brokers Bonlnees foreign
19*903 2dl 183 223 163
0L0018099
Total 8/31/56
20*758
Soveaber ?, 19^6
7
Begligible amount of government soles - about $,000,000 Faint. fiooe food on regular bid basis.
Soft first peg* o* this vriteup for results of purchases sad sales of assets.
Auditors
Representative of ESS vill bo there.
Vs maintain our Internal auditing staff for regular audits of each division and detailed operations. Such audita are alvaye on a surprise hauls.
Insurance
FIA coverage on all Manufacturing properties except Canada, Buena Jtofc, San
Francisco and neir Elevator. Ibis FIA policy for fire, wind, haU, explosion, aircraft, smoke, vandallea and sprinkler*
Coverage Is o agreed amount basis, vith no co-insurance requirement.
Locations excluded are under separate policies for fire, extended coverage and Sprinkler.
Elevator under 0.0.A. policy.
tfee end occupancy insurance also in Fit for locations they cover for fire, etc.
Also carry ocean Marine and cargo Insurance to extent necessary*
Carry boiler and pressure vessel insurance vbere necessary.
All employees bonded in adequate amount.
Workmen1* Coopensatlon*^ve cany self-iasurcnce la states vbere possible, vith an override $1,000,000 policy for catastrophe. Self-insurance on Workmen's Compensation has saved us over 1650,000 in the last 25 years.
Also carry comprehensive general liability, In&iudljg product liability. Also liability and property damage.
Annual Report oost per copy
Stockholder* should not be granted special opportunities to buy company products. loo difficult to handle and Impractical. Also unfair.
Stock dividend
these do not add much, if anything* they spread eamiz^s over a vlder number of shares, and in the end the price per Share vill probably adjust accordingly. Ve certainly are not in favor nov.
Contributions '
ctnoisioo
Veil controlled under committee
Boveaber 27, 1956
e
Sale and leaseback has been extensively investigated, but 10 cot applicable to our peratieos at present.
Salaries
Cur officer# salary rates, including bonus* arc fully In Uns vlth studies on this subject such os those by AMA. Xf anything, slightly lover then coapeniee in alailer fields and. else*
V oust be cctspetitiva in total salary and in such thlza as stock options to attract and bold good nan*
Khile vo do not have an outside director to directly police these things, peyae&ts are public knowledge in cur proxy, and being an inside Board ve are probably now conscious of this feature then if salary rates, etc*, uere set by outside Board neabera*
BUMtnap Detail on Financing vill follow.
b * v. mzt
GLPPlBlOl