Document DDrB1MKEONjmknDkLr3LDzkxa

Annual Report 1953 Th e Sh e r w in -Wil l ia ms Co . IS 15361 Th e Sh e r w in -Wil l ia ms Co . A, W. STEUDEL PRESIDENT .. To the Stockholders: Herewith are presented the Consolidated Balance Sheet and the Consolidated Income and Surplus Statements of The Sherwin-Williams Company for the fiscal year ended August 31, 1953- The earnings before Federal Income Tax and provision for the Pension Plan are $22,722,290. The amount estimated for Federal Income and ExcessProfits Tax is $10,352,559. $2,400,000 has been set aside for the Pension Plan. This is approximately equivalent to the annual normal requirement of the Plan, together with 10% of the origi nal past service liability, as estimated by the Company's actuaries in 1947. The final consolidated net earnings after all deductions are $9,969,731. After allowing for Preferred Dividends, these earn ings are equivalent to $7.29 per share on the outstanding 1,2,77,854 shares of Common Stock. The results of this year's operations topped all pre vious years both in sales and earnings. Sales were 4.2% larger than last year and earnings before Federal Income Taxes were $2,333,133 better. Practically all divisions of the Company contributed to this increase. There was a substantial gain in the principal part of the Company's business, namely in sales of consumer products through the Company's dealers and stores. Super Kem-Tone and Kem'Glo continue to enjoy the highest acceptance in the country in their respective fields of wall paint and alb purpose enamel. Sales of these two products substantially exceeded those of any previous year. The volume of industrial finishes also was considerably greater; than last year. The Pigment and Chemical Division sales were just about even with the previous year. A decline in sales to the Government, on which the profit margin is negligible, brought down to some extent the average percent in the sales gain for the year. Plant expenditures covered a great many additions and improvements to existing facilities, none of which, how* ever, were large enough to require special comment. Referring to the Company's foreign investments, the earnings of the Cuban and Mexican corporations are ineluded in the consolidated income'and compare very favorably with previous years. A new plant is being built in Mexico, which will be paid for entirely out of funds accumulated from earnings in Mexico. The profits of the Brazilian Company are not taken into the Company's consolidated earnings on account of exchange restrictions, but this year it was possible to transfer a substantial dividend in dollars to this country. As to Argentina, this year final payment will be made out of the earnings of the Argentine Company to liquidate the loan that was originally granted by a bank in Buenos Aires to finance our entire investment there. In other words, the whole undertaking will have been paid for out of earnings of the Argentine Company with no dol lars involved. As above stated, $2,400,000 has been appropriated for the Pension fund. During the year an amendment was made to the Plan whereby all compensation except over time is treated as creditable earnings in determining an employee's pension. There was also adopted another amendment according to which the Plan contains no maximum limitation on the amount of pension benefits, except such as is inherent in the benefit formula. Once again the management expresses its thanks to the staff in our plants, offices,! and branches for their loyalty and enthusiastic support in promoting the in terests of the Company. --:--S-W 000273 > N ote A -- Securities o f subsidiaries n o t consolidated are stated a t cost and include investments o f approxi- m ately $4,119,000 in a partly-ow ned Canadian subsidiary, and approxim ately $822,000 in South Am erican fltibsiuiarics, T he proportionate share o f accumulated net profits, not taken up, applicable to investments in subsidiaries n o t consolidated amounted to approxim ately $3,791,000 for the Canadian subsidiary and approxi* mately $4,897,000 for the South Am erican subsidiaries. Transfer o f funds from the South Am erican subside . ara.. 7 > rTa1 73 73 nr O '' . IQ '.'...0. X> 73 a PT ri <& SaT oC9p' 5rv 3I ..e& * a.; 3 3 "3 -o ? "4 I.' 3 -4 -- c/J 23 ' 2> 2Z 3 -o 4 73 > O ra t > "73' 73 C/3 : r 3 2. IV . 3;' 3- ' C- 3 23 O *ra3 . H < > z j4 >S- '3j' z* o A A 3' tfl ?psjr r"ftv* g 2 *T3 zn 3:3 3 n<* "e3*: 2 ra 3 s'! -4 z < .2.8. =r S 2; cH4 2 ra. H 4 33, zC30 <'"5 > 8oc** S?r' ;,C? O.- -4 c<. Xra 73 '&. > 3 =wt &3 S r> 35 S -ra f- 3 <? > r`3 i o/-- p3 73 ra Z H rv j r 73' Oi 3 ?3, ra, Z -}: . > 8 I. ra C/3 & ra:" r- o 4 --- "3'- 3 ra 5* 3 a8 9 3 C- -} K w 02 SC w 3 h-H Z \ HH r* C O N S O LID A TE D B A LA N C E SHEET il g oo- *- . Ch-* USpO4i , -- Os Si N> o is 00 -u M Id N vp S' ,o > c o G v> H S' .ttf ny 3 ro.- ?8 3 5: ra -a -a if H ?g S7 8 ??! 11 O3 .335 03 (V 70 < 3 c I.: |s 3 S=3r SQT. 7?. O' S.. 3- 9 it- ' >z a3. Cu : o Cfl S' P 2 5- (Tr* O " ;8 ra S t2 3\ W 3 y> g 2. 8 s S- 4H * 8 " si T:B- < ^ .S. ss3^'S u.* s/i si Co VO w> jr Si ^ t VO CO N H C.3 91 ^?1 s2 Oq . .c5 3 S SP Z 3* -4 <3 E` Z ^ g2* i I- s g. 3 Q- 3 > 8 I S' 2 Is. |2 Msr 23 (a ? is M Z 2H 3 > V 03 --r a- H2 ra. a. . S5 I) w a; n 3a. f? 3 o S 3 ST s 1 Ut Q>i IU 2cu -5*0 o' Ca a .a I? 3I Si s ra ra4% Cfik M *-J 2 8S n b Cj 5 32 OP o O & > z > z d a o z 02 o tr* M d > H td d 02 C cs 02 > & 1--1 w s- W 02 000274 aries is restricted and although they arew holly-ow ned theaccounts o f such subsidiaries aren o t consolidated for th a t reason. N o te B --N e t cu rre n t assets (approxim ately 3% o f consolidated net cu rre n t assets) o f consolidated foreign subsidiaries, located in M e xico andC uba, have teentranslated in to U . 8. dollars at theapplicable exchange rates in effect a t A u g u s t 31, 1953. CONSOLIDATED PROFIT AND LOSS AND SURPLUS THE SHERWIN-WILLIAMS COMPANY AND CONSOLIDATED SUBSIDIARIES Year Ended August 31, 1953 PROFIT AND LOS Profit from operations for the year ended August 31, 1953, before other income, provision for depreciation and other deductions, and federal taxes on income.............................. Other income: Dividends received on capital stock of un consolidated subsidiaries--Note A.......... Unused portion of reserve returned to income............... ....................... $ 529,004 370,546 Miscellaneous................................... 117,165 $24,790,000 1,016,715 Deductions: Provision for pensions.......................... Provision for depreciation.............. Provision for foreign taxes and miscellaneous items............................................................. Interest expense............................. Net charge arising from sale or abandonment of depreciable assets ... Federal taxes on income : Provision for the year--estimated: Normal tax and surtax $10,100,000 Excess profits tax........ 450,000 $10,550,000 Adjustments for prior years 197,441* NET PROFIT.. .... .... $2,400,000 2,227,556 563,730 164,418 128,721 10,352,559 15,836,984 $ 9,969,731 EARNED SURPLUS Balance at September x, 195a...... Add net profit for the year.............. $50,876,510 9,969,731 Deduct: Cash dividends declared and paid or provided for during the year: Preferred--$4.00 per share ........................ $ 654.149 Common--$3-62)4 per share........................ 4,632,224 $60,846,241 $5,286,373 Premium on preferred stock redeemed 23,624 5,309,997 BALANCE AT AUGUST 31, 1953... $55.536,244 * Indicates red figure. Note A--Equity in net profit for the year ended August 31,1953, reported by unconsolidated subsidiaries was approximately $1,^34,000 more than dividends received. Note B--The profit and loss accounts of the consolidated foreign subsidiaries (Mexico and Cuba) have been translated into U. S. dollars mainly on the basis of rates of exchange in effect at the close of the year. S-W 000275 2 EXECUTIVE DEPARTMENT 101 PROSPECT AVC.. N. W. CLEVELAND We sire of the opinion selling prices in our industry will be fairly stable for the next 6 months. Inventories should remain about the same as a year ago. The nwber of employees on our payrolls will show a very slight increase. Hew orders are slightly higher than a year ago. 21A47~Q AUDITORS' CERTIFICATE Board of Directors, The Sherwin-Williams Company, Cleveland, Ohio.. We have examined the consolidated balance sheet of The SherwinWilliams Company and consolidated subsidiaries as of August j i, 1953, and the related statements of consolidated profit. and loss and surplus for the year then ended. Our exanunation was made in accord ance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other audit? -ing procedures as we considered necessary in the circumstances. In our opinion, the accompanying balance sheet and summaries of profit and loss and surplus present fairly the consolidated financial position of The Sherwin-Williams Company and consolidated sub sidiaries at August 31, 1953, and the consolidated results of their operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Cleveland, Ohio October 12, 1953 ERNST 6? ERNST Certified Public Accountants Th e Sh e r w in -Wil l ia ms Co . 101 Prospect Ave., M. W. Founded in r866 Cleveland, Ohio Manufacturers of Paints, Varnishes, . Colors, Stains, Enamels,. Lacquers, Lead Products, Dyes, Chemicals, Lithopone, Litharge, Linseed Oil, Dry Colors, Cans, Insecticides. Main Plants Cleveland ' Chicago Dayton * Detroit ' Newark * Pittsburgh . Hubbard, Ohio * Oakland, Cal. - Bound Brook, N. J. - Gibbsboro, N. J. Deshler, Ohio - Dallas * Los Angeles * Coffeyville, Kan. A. D. BALDWIN A. H. BURT S. B. COOL2DGE C. S. EATON GEORGE GUND Directors C. P. JARDEN D. A. KOHR C. M. LEMPERLY G. H. ROBERTSON l. H. SCHROEDER A. W. STEUDEL C. M. WHITE H. D. WHITTLESEY THOS. E. WILSON L. W. WOLCOTT Officers A. W. STEUDEL, Pru&nt A. H. BURT, Vice PrenSene S. B. COOUDCE, Vie. Prewdem CM, LEMPERLY, Vice Premiene L. H. SCHROEDER, Vice Pmulenc and Treasurer Bi M. VAN CLEVE, Vice Prendene N. E. VAN STONE, Vice Preeidcne H. D. WHITTLESEY, Vice Preeide* F. J. SQUIRES, Secretary Transfer Agents CLEVELAND TRUST COMPANY Cievebad, Ohio BANKERS TRUST COMPANY New York, N. Y. CENTRAL NATIONAL BANK derekai, Ohio Registrars GUARANTY TRUST COMPANY New York, N. Y.