Document DGbQKoe3ORm5YRnj6myga31yn

Thirty-Second Annual Report Fiscal Year Ended October 31st, 1949 THE GLIDDEN COMPANY GLD002789 THE GLIDDEN COMPANY CLEVELAND, OHIO To t h e St o c k h o id e r s or Th e Gu o d en Co mp a n y : January 12, 1950 The last fiscal year of your Company which ended October 31, 1949 was a year of great progress in research and development. During this period large expenditures were made in order to bring to a fruition some of the projects on which our organization has been working for some time. To illustrate, our Paint and Varnish Division succeeded in pro ducing Spred SATIN, a wonderful new washable wall paint which is an exclusive Glidden formulation consisting of the finest pigments of our own manufacture, plus the same ingredients used in making syn thetic rubber. This development marks a new era in paint formulation. In the Food Division, coincident with the passage of the Yellow Margarine Bill in Ohio, this Division has perfected our Durkee Grade AA Margarine which is of the highest quality. In the Soybean Division, because of their experience in our Research Laboratories in the development of hormones, including progesterone and testosterone from soybean sterols, our steroid research chemists were well equipped to participate actively in the development of the cortical hormones. Work along this line is proceeding rapidly and we hope to be able to produce cortisone and its allied compounds in quan tity before the end of 1950. The work of this laboratory on hormones established a new record in this direction, and in view of the great need for cortisone for the more than seven million sufferers from arthritis, it is evident that if our plans are realized, this will result in an important development for our fine chemical department. Throughout the year special emphasis has been placed on the re duction of costs s.nd the improvement of our materials handling. This has resulted in greater efficiency and the saving of labor costs. Our program for the rehabilitation and improvement of our various factories has been practically completed and our expenses in this direction for the new year will be greatly reduced as all of the various plants are now in first class condition. In the four years since Novem ber 1, 1945, our Company has expended a total of $14,334,502.42 in net plant and capital additions, and through these capital expenditures we have greatly increased our productive capacity. Major units added last year are a new soybean processing plant and storage silos at Indian apolis, a margarine manufacturing plant at Macon, Georgia, a new GLD002790 soybean extraction plant at Chicago, and a margarine distribution warehouse at Cambridge, Massachusetts. At the present time we have no plans for any large major expansion, and our construction program that has been under way for the last four years is nearly completed. Our net dollar sales for the year declined approximately 20% due to the big drop in prices of raw materials and finished products. In units of output, our volume was within 5% of the previous year. The net profit, after taxes and all charges, was $6,191,923.16, equiv alent after preferred dividends, to $3.23 on the present outstanding common stock, and after deducting treasury shares. Our gross inventory was very substantially decreased in 1949. Under the 1-1FO method of inventory accounting, the principal raw materials were carried on our books at the close of the year at a valuation of $3,537:i319.')9 less than replacement cost at that time. The balance of the inventories were priced at the lower of cost or market. The Com pany continues its policy of protecting inventories by hedging on the commodity markets, so far as possible, our stocks of soybeans and edible oils. In the case of flaxseed and linseed oil, our commodity con tracts with the Government afford inventory protection. The net worth of your Company, excluding treasury shares, at October 31, 1949 was $56,837,492.20, or $26.32 per common share on the shares outstanding at that date. This compares with a net worth per common share on October 31, 1947 of $21.93 and on October 31, 1948 of $25.05. This increasing value of our stock reflects the policy of having plowed back a portion of our earnings each year into income producing properties. Our labor relations at our various plants are cooperative and friendly and we find that labor is more efficient than it has been for some time. On behalf of the Board of Directors we extend our thanks and sin cere appreciation to all the members of the organization for their co operation during the past year. ADRIAN I). JOYCE Chairman of the Board DWIGHT P. JOYCE President GLD002791 CONSOLIDATED PROFIT AND LOSS AND SURPLUS The Glidden Company and Canadian Subsidiary Fiscal year ended October 31, 1949 PROFIT AND LOSS STATEMENT Net sales...................................... ...................................................... Cost of goods sold, selling, administrative and general expenses, including provision of $1,618,226.11 for depreciation and depletion........................................... . . . . Other income ...................................................................................... Other deductions: Adjustment of net current assets and miscellaneous other assets cf Canadian subsidiary to Control Board rate of exchange . ........................................$ Loss on disposal of properties .......... Interest on note] and bans ........... 145,120.68 103,982.84 49,93234 Pr o p it Be p o iie Ta x e s o k In c o me ...................................... Taxes on income -- estimi ted: Federal income taxes.................................$ 3,900,000.00 Dominion and state taxes ....................................... 57,000.00 Co n s o l id at e)) Net Paorrr .............. $160,143,275.90 150,005,994.01 $ 10 137,281.89 310,677.13 $ 10,447,959.02 299,035.86 $ 10,148,923.16 3,957,000.00 $ 6,191,923.16 Note //--Consolidated net profit includes $74,588.59 for the Canadian subsidiary, representing that subsidhiry's net profit for the year after giving effect to adjustment of its net current assets and miscellaneous other assets to Control Board rate of exchange in effect at October 31, 1949. CAPITAL SURPLUS SURPLUS Balance at November 1, 1948 ............................................................... Add portion of common stock dividend in excess of stated value of shirt] issued.................... .................................... Balance at October 31, 1949 ............................................................... $ 12,581,438.41 689,075.00 $ 13,270,513.41 EARNED SURPLUS Balance at November 1, 1948 ................................... $27,530,177.07 Add: Net profit for the fistal year . . . $6,191,923.16 Recovery on investments previously charged ofi'.................................. 193326.10 6,385,249.26 Deduct dividend]: $33,915,426.33 Paid in cash: Convertible preferred--$2.25 per share .......................................$ 448,984.21 Common-- $1.60 per share . . . 2,838,850.00 $3,287,834.21 Paid in common stock and cash: 2% on common stock--32,050 shares at npprosimate quoted market price, plus $72,586.80 cash in lieu of issuance of fractions! shares....................... 841,786.80 4,129,62131 Balance at October 31, 1949 ............................................................... To t al Su r pl u s At Oc t o eer 31, 1949 ............................... 29,785,80532 $ 43,056,318.73 Gf-D00279? CONSOLIDATED ! The Glidden Company a October ASSETS Cu r r e n t As s et s Cash........................................................... $ 6,561,251.18 Dominion of Canada Victory Loan Bonds 91,761.36 Trade accounts receivable (includes notes $238,175.23) .................................................... $10,924,605.80 Less allowances for doubtful accounts .... 364,738.81 10,559,866.99 Inventories--raw materials, in process, and finished good;;: Principal raw materials are stated at cost (last-in, first-out method) less reserve to reduce certain items to replacement mar ket; other items are stated at the lower of cost (accumulated average) or replace ment market............................................ Other current notes and accounts receivable and advance:;.................................................... To t a i Cu r r e n t As s e t s ................... 29,124,601.28 1,418,203.13 $47,755,683.94 Ot h e r As s et s Advance payment on account of possible federal income tax assessment....................................$ 1,000,000.00 Cash surrender value of life insurance .... 740,207.50 Miscellaneous notes and accounts receivable, advances, and investments............................ 798,990.75 Estimated refund of federal and dominion taxes on income of prior years................................ 248,310.63 2,787,508.88 Pr o p e r t v , Pl a n t , a n d Eq u ip me n t Gross amounts represent cost less write-down in 1932 Land ........................................................... $ 2,831,977.08 Builaings, machinery, and equipment . . 40,089,513.28 $42,921,490.36 Less accumulated depreciation, depletion, and amortization.................................... 17,473,266.36 25,448,224.00 De f e r r e d Ch a r g e s Prepaid insurance and expenses 785,346.92 $76,776,763.74 GLD002793 BALANCE SHEET nd Canadian Subsidiary 31, 1949 LIABILITIES, CAPITAL STOCK, AND SURPLUS Cu r r e n t Lia b il it ie s Notes payable to banks................... ....................................... . $ 5,000,000.00 Accounts payable ............................................................... 7,122,075.42 Accrued taxes, royalties, and insurance........................................ 914,420.98 Federal, state, and dominion taxes on income -- estimated ....................................................................... 4,402,775.14 To t al Cu r r en t Lia b il it ie s ........................................... $17,439,271.54 Re s e r v e For contingencies........................................................................... 2,500,000.00 Ca p it a l St o c k a n d Su r p l u s Capital stock: Convertible preferred cumulative, par value $50.00 a share redeemable at $52.50 a share, each share convertible into approx imately 1.478 shares of common stock: Authorized 200,000 shares t V Issued and outstanding 199,540 shares . $ 9,977,000.00 Common without par value: Authorized 3,000,000 shares Outstanding including treasury shares, 1,816,050 shares Reserved for conversion 294,920 shares Stated capital............................................... 4,540,125.00 $14,517,125.00 Surplus: Capital surplus....................$13,270,513.41 Earned surplus (includes $2,303,012.61 of surplus of Canadian subsidiary) . . 29,785,805.32 $43,056,318.73 Less common stock in treas ury 35,514 shares, at cost (including 29,835 shares re served for sale to certain officers and key employees) 735,951.53 42,320,367.20 56,837,492.20 $76,776,763.74 Note--Assets of Canadian subsidiary included herein comprise net current assets and miscellaneous other assets, $1,451,206.61, at Lie Control Board rate ofexchange, and property, plant and equipment, $522,740.76, at cost tci the subsidiary. GLD002794 ERNST 8c ERNST CLEVELAND UNION COMUKftCK OUiLOfMO Board of Directors, The Glidden Company, Cleveland, Ohio. We have examined the consolidated balance sheet of The Glidden Company and Canadian subsidiary as of October 31, 1949, and the related statements of consolidated profit and loss and surplus for the fiscal year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In oar opinion, the accompanying balance sheet and statements of profit and loss and surplus present fairly the consolidated financial posi tion of The Glidden Company and Canadian subsidiary at October 31, 1949, and the results of their operations for the fiscal year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Cleveland, Ohio December IS, 1949 ERNST & ERNST Certified Public Accountants GLD002795 BOARD OF DIRECTORS ADRIAN D. JOYCE WlLl.lAM J. O'BRIEN DWIGHT P. JOYCE PAU1. E SPRAGUE CLIFTON M. KOLB JOHN A. PETERS JOHN P. RUTH NESTOR B. BETZOLD RALPH a GOLSETH ALEXANDER D. DUNCAN OFFICERS ADRIAN D. JOYCE, Ctuirmin Boird of Director! DWIGHT P. JOYCE, Proliant CLIFTON M. KOLB, Senior Vi Pro. tnj Secy. PAUL E. SPRAGUE, Viet; President. WILLIAM J. O'BRIEN, Vice Pretident NEWELL BEATTY, Viet Prtiident ALEXANDER . DUNCAN, Vice Pretident Trsnofer Aftent THE NEW YORK TRUST COMPANY New York City LOYELl Y. PULLIAM. Vice Pretident JOHN P. RUTH, Viee Pteeident RALPH G. GOLSETH, Vice Pnddent JOHN A. PETERS, Tteuuter B. W. MAXEY, Controller W. W. CONANT, Atmtuc Secretety R. D. HORNER, Atiiittat Secicnry Registrar THE CHASE NATIONAL BANK New York City GLIDDEN DIVISIONS The Glidden Company Cleveland, Ohio The A. Wilhelm Company Reading, Pennsylvania The American Paint Works New Orleans, Louisiana Durkee Famous Foods Elston Avenue, Chicago, Illinois; Durkee Famous Foods Iron Street, Chicago, Illmoii Durkee Famous Foods Norwalk, Ohio PAINT The Campbell Paint It Varnish Co. St. Louis, Missouri The Glidden Company Minneapolis, Minnesota Nubian Paint It Varnish Company Chicago, Illinois FOOD Durkee Famous Foods Portland, Oregon Durkee Famous Foods Louisville, Kentucky Durket-McCadam Company Cambridge, Mass, The Glidden Company, Ltd. Toronto, Ontario, Canada The Glidden Company San Francisco, California Adams It Eltmg Company Chicago, Illinois Durkee Famous Foods Berkeley, California Durkee Famous Foods Elmhurst, Long Island, New York Durkee Famous Foods Macon, Georgia CHEMICALS, PIGMENTS AND METALS The Oramical fc Pigment Company St. Helena (Baltimore), Maryland The Chemical k Pigment Company Oakland, California The Chemical k Pigment Company Collinsville, Illinois Metah Refining Company Hanmoad, Indiana Euitoa Lead Company Scranton, Pennsylvania SOYA PRODUCTS 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 Clidden Company Berkeley, California The Glidden Company Portland, Oregon MINES The Chemical Jr Pigment Company Baryte. Mines Baltic Mountain, Nevada Yadkin Mica and Tlmenite Company Lenoir, North Carolina Retail Stores and Warehouses in the Principal Cities Growth Product* Company Pascagoula, MuiiiMppi AFFILIATED CORPORATIONS Jacksonville Processing Corporation Jacksonville, Florida Zinc Chemical Company, Inc. New York, New York GL 0002796 DIVERSIFIED PRODUCTS BY GLIDDEN FOODS Durkec's Famous Dressing Durkec's Grid': AA Margarine Durkec's Margarine Durkcc's Shortening Durkec's Salad Dressing Durkec's Shred Cocoanut Durkec's Spices Durkec's Wortestershire Sauce Special ingredients for Bakeries and Confectioners SOYBEAN PRODUCTS "Alpha" Prottin* Procein Fine chemical!. Lecithin Soya Meal Sterols Hormones Soya Flour Soya Flakes LIVE STOCK AND POULTRY IOODS Glidden Catte and Hog Feed Glidden Poultry Feed Vitamin and Growth Products PAINTS, VARNISHES AND LACQUERS SPRF.D SPREX1 Luster Spred SATIN Jap-A-I-ac Ripclin Enamel Spray-I)ay-L; te GLidair Aviation Finishes Endurance House Paint Endurance Imperial House Paint Gliddenspar Varnish Nubelite Industrial Paints Industrial Licquers, Enamels and Varnishes Finishes for all Manufactured Products GLID-N Specialties: 5% DDT Liquid Cleaners Floor Wax Weed Killers VEGETABLE OILS Soybean Oils Cocoanut Oils Cottonseed Oils Peanut Oils Corn Oils Palm Oils Linseed Oils CHEMICALS AND PIGMENTS Titanium Dioxide Lithopone Cadmium Colors Litharge Red Lead Easton White Lead Cuprous Oxide Dry Colors Zinc Sulphate Crystals Copperas Coal Tar Products METALS AND MINERALS Powdered Iron and Copper Powdered Lead and Tin Glidden Type Metal Barytes Barium Products Hmenite NAVAL STORES Pigmentar Rosins Guai-a-phene Camphene Metal Resinates Alpha Pinene Beta Pinene Turpentine Nclio Resin Charcoal Solvents Synthetic Rubber Compounds *Traitmark Rjpsttrtd GLD002797