Document 8RQdrD4VaEv4MoRR4OonxLv5a

THIRTY-FIRST ANNUAL REPORT FISCAL YEAR ENDED OCTOBER 31st, 1948 THE GLIDDEN COMPANY GLD002798 THE CUDDEN COMPANY CLEVELAND, OHIO To the Stockholders of The Glidden Company: December 20, 1948 Tlie fiscal year of your Company that was ended October 31, 1948 presented many problems. Wage and salary increases were necessary to keep pace with the rising costs of living, and other manufacturing costs increased proportionately. Price rises are no longer the quick answer to a higher level of costs. Greater efficiency in production and in dis tribution is the only answer. Peak prices of our principal raw materials were reached during the first half of the year, but since then there has been a gradual leveling off indicating that our economy is tending toward normalcy. The net sales for the year amounted to $202,318,794.33 as compared with sales of $185,753,245.89 for the previous year. Our sales volume reached a new high level in the history of the business, and the unit volume of manufactured products also reached an all-time high. The net profit, after taxes and all charges, amounted to $9,276,819.18, equivalent, after preferred dividends, to $5.04 per share on the present outstanding common stock, and after deducting treasury shares. The earnings for the previous year on the same basis amounted to $7.57 per share. The difference is accounted for by a large increment in the inventory values due to rapidly advancing prices during 1947, and to the increased manufacturing costs due to higher wages, higher freight rates, and higher handling and storage costs during 1948, and to the fact that our earnings from our four plants on the Pacific Coast were seriously affected by the maritime strike and the strike in the petro leum industry, These strikes prevented our receiving raw materials from the Orient, and also prevented the exportation of manufactured products. The stock piling by the Government of essential metals such as lead, copper, tin and antimony helped to shorten the supply and raised prices--thus adversely affectingoperations of our Metals, Befining plant at Hammond, Indiana. Our increased sales volume necessitates larger inventories and increased working capital. Under the J.IFO method of inventory accounting, the principal raw materials were carried on our books at the close of the year at a valuation of $7,875,268.42 less than replacement cost on October 31, 1948. Other items are stated at the lower of cost or replacement market. As a matter of inventory protection, our stocks of soybeans and edible vegetable oils are, as far as possible, hedged in the commodity markets. In the case of stocks of flaxseed and linseed oil, our commodity contracts with the Govern ment afford inventory protection. Since the end of the war. as a result of the higher price level, capital requirements for working capital and for plant facilities have increased greatly. For this reason it has been necessary to retain a large percent of earnings for reinvestment in the business. During the year out expenditures for maintenance and repairs amounted to $2,508,083.01. Capital expenditures for additions to plant and equipment were $4,044,012.79. At the present time we have, under construction an additional extraction unit at our soya plant in Chicago, a complete soybean processing plant and storage silos at Indianapolis, Indiana, and a plant for the manufacture of margarine at Macon, Georgia. GLD002799 The regular quarterly dividend of 40 cents will be paid on January 3,1949 to Common stock of record November 24, 1948. In addition, a stock dividend of two shares for each 100 shares of common stock has been declared payable January 3,1949 to common stock holders of record November 26, 1948. Fractional shares or scrip will not be issued but will be paid for in cash on the basis of $20.00 per full share. In the opinion of the Counsel for the Company, the receipt of the stock dividend will not constitute income under existing Federal Income Tax law and regulations. The strategic and geographical location of our thirty-five plants, and the decentraliza tion of our manufacturing and sales activities, will prove of great advantage to our organization in the coming year. The control of production of our most important raw materials, and our well diversified business will insure substantial growth and develop ment. Earnings in the terms of present day dollars are currently running at a relatively high level, and employment is at peace time peak. As usual, on the last page of this report there is given a list of the Glidden Divisions, and on the seventh page, a list of Glidden diversified products. At the close of the year Mr. R. H. Horsburgh, Vice Chairman, resigned having reached the age of retirement according to our Pension and Retirement Plan. Mr. Horsburgh was an officer of the Company since its foundation in 1917. He served successively as Secretary-Treasurer, Treasurer, Vice President, Executive Vice President and Vice Chairman. During his many years he has ably assisted in the development of our organ ization and will continue to serve the Company as a Director. Labor relations continue to be cooperative and friendly, and the many plans worked out by the Company to provi de for the well-being of the employees appear to be bearing fruit. During the fiscal year our employees were paid $18,017,295.08 as compared with $16,630,020.96 in 1947. Dividends paid to stockholders in 1948 amounted to $3,785,659.70 as compared with $2,387,935.45 in 1947. The total number of our stockholders is now 16,765. The total number of our employees is 6,119. On behalf of the Board of Directors we extend our sincere appreciation to all the members of the organization on the many evidences of good will and cooperation during the past year. ADRIAN D. JOYCE Chairman of the Board DWIGHT P. JOYCE, President GLD002800 CONSOLIDATED The Glidden Company a October CURRENT ASSETS ASSETS Cash............................ .................................................................................................................... $ 5,784,855.11 Dominion of Canada Victory Loan Bondi.............................................................................. 25,000.00 Trade account! receivable (include! notei 1160,839.94)............................... 212,412,993.59 Leu reierves....................................... .............................................................. 350,457.79 12,062,535.80 Inventories--raw materials, in process, and finished goods: Principal raw materials ate stated at cost (last-in, first-out method) which did not exceed replacement market; other items are stated at the lower of cost (accumulated average) or replacement market................................................... Other current notes and account! receivable and advances, less reserve of 29,133.02 ..................................................................................................................................... 32,085,504.02 1,784,524.09 To t al Cu r r e n t As s e t s ...................................................................................................... 251,742,419.02 OTHER ASSETS Advance payment on account of possible federal income tax asstaament . 2 1,000,000.00 Cash surrender value of life insurance........................................................... 727,308.50 Miscellaneous notes and accounts receivable, advances, and investment!, less reserve of 211,392.(2 .............................................................................. 591,871.22 Estimated refund of federal and dominion taxes on income of prior years . 300,284.83 2,619,464.55 PROPERTY, PLANT', AND EQUIPMENT Gross amounts represent cost las write-down in 1932 Land............................................................................................ 2 2,710,785.09 Buildings, machinery', and equipment....................................................... 34,207,985.32 236,918,770.41 Less reserves for depreciation; depletion, and amortization.................... 16,368,499.78 20,550,270.63 DEFERRED CHARGES Prepaid insurance and expenses 743,416.37 275,655,570.57 I ! GLD002801 BALANCE SHEET tnd Canadian Subsidiary 31, 1948 LIABILITIES, CAPITAL STOCK, AND SURPLUS CURRENT LIABILITIES Notes payable to battles............................................................................................................. 2 3,500,000.00 Accounts payable............................................... ... ...................................................................... 8,654,100.31 Accrued taxes, royalties, and insurance...................................................................................... 773,058.12 Federal, state, and dominion taxes on income--estimated....................................................... 6,318,773.06 To t al Cu r r en t Lia b il it ie s .............................................................................................. 219,245,931.49 RESERVE For contingencies......................................................................................................................... 2,525,000.00 CAPITAL STOCK AND SURPLUS Capital stock: Convertible^ referred cumulative, par value 250.00 a share redeem able at 252.50 a share, each share convertible into approximately 1.45 shares of common stock: Authorized 200,000 shares Issued and outstanding 199,540 (hares..............................................$ 9,977,000.00 Common without par value: Authorized 3,000,000 shares Outstanding, including tre:isury shares, 1,784,000 shares Reserved for conversion 289,373 shares Stated capital.......................................................................................... 4,460,000.00 Surplus: 214,437,000.00 Capital surplus.................................................................. 212,581,438.41 Earned surplus (includes 22,228,424.02 of surplus of Canadian subsidiary) ................................................... 27,530,177.07 240,111,615.48 Less common stock in treasury 31,283 shares, at cost (in cludes 24,350 shares reserved for aale to certain officers and key employees)....................................................... 663,976.40 39,447,639.08 53,884,639.08 CONTINGENT LIABILITIES Letters of credit outstanding............................................... 2 44,100.00 275,655,570.57 GLD002802 CONSOLIDATED PROFIT AND LOSS AND SURPLUS The Glidden Company and Canadian Subsidiary Fiscal Year ended October 31,1948 PROFIT AND LOSS STATEMENT Net ule........................................ 3202,318,794.33 Cost of goods sold, idling, administrative and general expenses, including provision of 31,343,959.36 for depreciation and depletion....................................................... 187,265,190.89 Other income.................................................................. 315,053/503.44 389,215.74 Pr o f it Bef o r e Tax es o h In c o me.................................................................................315,442,819.18 Taxes on income: Provision for the year--estimated: Federal income taxes................ Dominion and state taxes . . . Co n s o l id a t ed Ne t Pr o f it 3 6,000,000.00 166,000.00 6,166,000.00 ........................ 3 9.276.819.18 CAPITAL SURPLUS SURPLUS Balance at November 1, 1947, and October 31, 1948 ............................................................... 312,581,438.41 EARNED SURPLUS Balance at November 1, 1947 .................... Add net profit for the fiscal year................ Deduct cash dividends paid: Convertible preferred--32.25 per share . Common--31.90 per share................... Balance at October 31, 1948.................... To t a l Su r pl u s a t Oc t o be r 31, 1948 .................... 322,039,017.59 .................... 9,276,819.18 331,315,836.77 3 448,984.70 3,336,675.00 3,785,659.70 ............................................... 27.530.177.07 ............................................... 340.11U1S.48 g LD002803 ERNST & ERNST CLEVELAND UNION COMMtftCS IU1LSINN Board of Director., The Glidden Company, Cleveland, Ohio. We have examined the consolidated balance sheet of The Glidden Company and its Canadian subsidiary as ofOctober 31, 1948, and the related consolidated statements of profit and loss and surplus for the fiscal year then ended. Our examination was made in accordance with generally accepted auditing standards, and accord ingly included such tests of the accounting records and such other auditing procedures as we considered neces sary in the circumstances. In our opinion, the accompanying balance sheet and related statements of profit and lots and surplus present fairly the consolidated financial position of The Glidden Company and its Canadian subsidiary at October 31, 1918, and the results of their operations for the fiscal year then ended, in conformity with generally accepted accounting principles appled on a basis consistent with that of the preceding year. ERNST k ERNST Certified Public Accountants Cleveland, Ohio December 15, 1948 DIVERSIFIED PRODUCTS BY GLIDDEN FOODS Durkee's Famous Dressing Durkee's Margarine Durkee's Shortening Durkee's Salad Dressing Durkec'i Shred Cocoanut Durkee's Spices Durkee's Worcestershire Sauce Special ingredients for Bakeries and Coofectionert SOYBEAN PRODUCTS "Alpha" Protein* Protein fine chemicals Lecithin Soya Meal Sterols Hormones Soya Flour Soya Flikei LTVE STOCK AND POULTRY FOODS Glidden Cattle and Hog Feed Glidden Poultry Feed Vitamin and Growth Products PAINTS. VARNISHES AND LACQUERS SPREI* SPRED LUSTER Jip-A'Uc Rjpolin Enamel Spray<Day*Lit Glidalr Ariirion Finishes Endurance House Paint Gliddriupar Varnish Nubeliu Induatiial Paints Industrial Lacquers. Enamels and Varnishes Finishes lee all Manufactured Products GL1D-N Specialties S% DDT Liquid Cleaners Floo* Was Weed EiUers VEGETABLE OILS Soybean Oils Cocoanut Oils Cottonseed Oils Peanut Oils Cora Oils Palm Oils Linseed Oils CHEMICALS AND PIGMENTS Titanium Dioxide Uthopooa Cadmium Colore Litharge Red Lead Eostsn White Lead Cuprous Oxide Dry Colors Zinc Sulphate Crystals Copperas Coal Tar Products METALS AND MINERALS Pondered Iron and Copper Powdered Lead and Tin Glidden Type Metal Barytes Barium Products Ilmcnlte NAVAL STORES Pigmentar Rosins GuaLa-pbeae Camphene Metal Restates Alpha Pinene Beta Flncne Turpentine Ndio Redo Charcoal Solvents Synthetic Rubber Compounds *Trsdmsrk RiiuUrtd GLD002804 BOARD OF DIRECTORS ADRIAN D. JOYCE ROBERT H. HORSBURGH WILLIAM J. O'BRIEN DWIGHT P. JOYCE PAUL E. SPRAGUE CLIFTON U. KOLB JOHN A. PETERS JOHN P. RUTH LOVELL Y. PULLIAM NESTOR B. SETZOLD OFFICERS ADRIAN D. JOYCE, Chairman Board of Directors DWIGHT P. JOYCE, President PAUL E. SPRAGUE, Mce Present WILLIAM J. O'BRIEN, Vice President NEWELL BEATTY, Vice President ALEXANDER D. DUNCAN, Vice President LOVELL Y. PULLIAM, Vice President JOHN P. RUTH, Vice Preeident RALPH a GOLSETH, Vice Preeideot JOHN A. PETERS, Trcuurer CLIFTON M. KOLB, Secretary B. W. MAXEY, Controller W. W. CONANT, Aiiiitaat Secreurjr Tranefer Agent THE NEW YORK TRUST COMPANY Nee York City R(Utrtr THE CHASE NATIONAL BANK New York City The Glidden Company Cleveland, Ohio The A. Wilhelm Company Reading, Pennsylvania The American Paint Works New Orleans, Louisiana GLIDDEN DIVISIONS PAINT The Campbell Paint fir Varnish Go. St. Louis, Missouri The Glidden Company Minneapolis, Minnesota Nubian Paint k Varnish Company Chicago, Illinois The Glidden Company, Ltd. Toronto. Ontario, Canada The Glidden Company San Francisco, California Adams It EJting Company Chicago, Illinois FOOD Durkce Famous Foods Elston Avenue, Chicago, Illinois Durkce Famous Foods lion Street, Chicago, Illinois Durkec Famous Foods Norwalk, Ohio Durkee Famous Foods Portland, Oregon Durkee Famous Foods Louisville, Kentucky Durkee Famous Foods Berkeley, California Durkee Famous Foods Elmhurst, Long Island, New York Durkee Famous Foods Mu m, Georgia CHEMICALS, PIGMENTS AND METALS The Chemical & Pigment Comps ay St. Helena (Baltimore), Maryland The Chemical fir Pigment Company Oakland, California The Chemical k Pigment Company Collinsville, Illinois Metals Refining Company Hammond, It diana Easton Lead Company Scranton, Pennsylvania SOYA VRODUCTS The Glidden Company Chicago, Illinois The Glidden Company Indianapolis, Indiana NAVAL STORES The Glidden Company Jacksonville, Florida The Glidden Company Valdosta, Georgia FEED MILL The Glidden Company Indianapolis, Indiana The Glidden Company Buena Park, California VEGETABLE OILS The Glidden Company Berkeley, California The Glidden Company Portland, Oregon MINES The Chemical fie Pigment Company Barytes Mines Battle Mountain, Nevada Yadkin Mica and Bmenlte Company Lenoir, North Carolina Rmif Store* and Warehouses in the Principal Cities AFFILIATED CORPORATIONS Growth Products Company Pascagoula, Mississippi Zinc Chemical Company, Inc. New Yeck, New York GLD002805