Document BqK81oQn0NZwG6qbmrjNYbww

PLAINTIFF'S EXHIBIT yinnual Report Riley Stoker Corporation December 31, 1941 Officers Fred H. Daniels...................................................... President Louis E. Griffith . Vice-president and General Manager David K. Beach .... Vice-president and Treasurer Aldus C. Higgins................................. . Vice-president James W. Armour ........ Vice-president Robert T. Riley..............................................Vice-president Chapin Riley ............................................................ Secretary Directors Aldus C. Higgins, Chairman Chapin Riley Fred H. Daniels Frank C. Smith, Jr. David K. Beach George N. Jeppson Louis E. Griffith Philip R. Mather rS-001684 W17rt>2 NUECES c TO THE STOCKHOLDERS OF RILEY STOKER CORPORATION: There is submitted, herewith, for your consideration the Audited Consolidated Financial Statement of your Company for the year 1941 including the Consolidated Balance Sheet as of the end of the year. The net profit of $709,985.10 after provision for Federal taxes of $1,074,013.48 is the largest in the history of the Company, equivalent to $2.00 per share on the Common Stock after deduction of the dividend of $6.00 per share on the Preferred Stock. During the year dividends of $6.00 per share, amounting to $21,600.00, were paid on the Preferred Stock and 10 cents per share, $34,389.10, on the Common Stock. In December 1941 the Badenhausen Corporation acquired twenty-nine acres of land at Cornwells Heights adjacent to its property there to provide for future expansion. Additions and replacements of buildings and equipment during the year increased the net investments in these assets after deduction of adequate reserves for depreciation by about $214,000.00. Appraisals completed since the end of the year 1941 at the Detroit and Cornwells Heights plants indicate that the book values of those properties are conservative. The large volume of business transacted has made it necessary to borrow during the year additional working capital amounting to $1,000,000.00, in spite of an improvement of over $500,000.00 in the net current position during the year. Your Company has entered the year 1942 with the largest volume of unfilled orders in its history, most of which carry high priority ratings. May 6, 1942 Yours very truly, F. H. Daniels, President RS-001686 1/17/02 NUECES ( To The Board op Directors Riley Stoker Corporation Worcester, Massachusetts We have examined the Consolidated Balance Sheet of the Riley Stoker Corporation and its Subsidiary Companies as at December 31, 1941 and the statements of Income and Surplus for the year ended on that date; have reviewed the system of internal control and accounting procedures of the Riley Stoker Corporation and the Badenhausen Corporation; and, without making a detailed audit of the transactions, have examined or tested accounting records of both companies and other supporting evidence, by methods and to the extent we deemed appropriate. With respect to the A. W. Cash Company of Decatur, Illinois, whose accounts were not audited by us, we were furnished with a report on that company prepared by independent Certified Public Accountants. Their report contained a comment on the inventory of that company to the effect that due to the high peak of unfilled orders at December 31, 1941, as a result of the Defense program, no physical inventory was taken and the inventory of that company in the amount of $279,662.15 represents book values. A representative number of items in process and in stock room checked by them to book records showed no exceptions of any consequence. In our opinion, subject to the remarks in the foregoing paragraph regarding the inventory of the A. W. Cash Company, the accompanying Consolidated Balance Sheet and related statements of Surplus and Income fairly present the consolidated position of the Riley Stoker Corporation and Subsidiary Companies as at December 31, 1941 and the consolidated results of operations of these companies for the year 1941, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Worcester, Massachusetts April 22, 1942 George A. Smith and Company, Certified Public Accountants RS-001686 1/17/02 NUECES O O Os" OO Os CM O CM Os $ t N R ILEY STOKER CORPORATION A N D SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET D e c e m b e r 31, 1941 gP 6 x i3 tr o Tj X a! 2 <J < o* SM3 Sg gP sdi D I. H% 3 2 to- a j= " 3 u u ao <2 81 a v tOocf*ti Oj3m^ 6 53 JS s80 3 -O 38 u > g > c*"> ' bd u 6? o -a v0.. tL.g ac3, -.Nyd cHo -ta ic l3 < yy3 j3 0$ < O T3 3c -~5 32 Eo^ < &- U ua. wcrf so o oP'1 CM X." cm eft C^M oQ UC~Mi fOMs CO CM. CO i. ao xO vcoo scoo so" cm" cm^ eft m <-n so O r-- c*~> SOOO C-Mh OOO' ^CO sCoM o-*of OOO' Ooss so" os" --<" cm" N O' N tft ~ OO O--S 3 O Q eft SOOO OXs COMO V^O vX" so" 6ft C nj a H05 x CO .n <CO n3 4J 3 E y 2 <J 3aE y co rt M y co o2 yJ CO e .h a y D a u ai z w CO WH *< ug ai >- P w Oh CO QOh 3 Z Consolidated Statement of Earned Surplus For the Year Ended December 31, 1941 Balance, December 31, 1940 ........................................................................................ 3 906,218.67 Additions Consolidated Net Income for Year after Taxes............................. Cancellation of Preferred Stock Sinking Fund Requirement for 1941 3709,985.10 48,299.10 758,284.20 31,664,502.87 Deductions Dividends Paid on Preferred Stock............................................... Dividends Paid on Common Stock............................................... Net of Sundry Adjustments pertaining to Federal and State Taxes of Prior Years....................................................................... Net of Sundry Other Adjustments pertaining to Prior Years . . 3 21,600.00 34,389.10 17,167.88 1,860.87 75,017.85 Balance, December 31, 1941.............................................................................................. 31,589,485.02 Consolidated Statement of Profit and Loss For the Year Ended December 31, 1941 Profit on Operations after Selling and Administrative Expenses, and Provision for Doubtful Accounts, but before Depreciation and Amortization....................... Depreciation and Amortization.................................................................................. Operating Profit.......................................................................................................... Other Income................................................................................................................ Gross Income................................................................................................................ Other Deductions.......................................................................................................... Net Income before Federal Income Taxes........................................................... Provision for Federal Income Taxes ................................................................. Balance to Surplus .................................................................................................... 31,888,573.82 109,820.86 31,778,752.96 30,032.36 31,808,785.32 24,786.74 31,783,998.58 1,074,013.48 3 709,985.10 r$j0016* 1/17/0* NUECES