Document DvGZN3vZ52qLpwzBJVDKo36zd

Annual Report 1951 Th e Sh e r w in -Wil l ia ms Co . N15443 Th e Sh e r w in -Wil l ia ms Co . A. W. STEUDEU MtCSIDCNT To the Stockholders: We present herewith the Consolidated Balance Sheet and Consoli dated Income and Surplus accounts of The Sherwin-Williams Com pany for the fiscal year ended August 31, 1951. The earnings before Federal Income Tax and provision for the Pension Plan are $21,810,255. The amount estimated for Federal Income and Excess-Profits Tax is $9,964,706. This calculation has been made on the basis of the new Revenue Act of 1951, enacted by Congress on October 20, 1951. $2,300,000 has again been set aside for the Pension Plan. This figure is approximately equivalent to the annual normal requirement of the Plan, together with 10% of the original past service liability, as estimated by the Company's actuaries. The final consolidated net earnings afterall deductions are $9,545,548. I These net earnings, after allowing for Preferred Dividends, are equivalent to $7.23 per share on the present outstanding 1,277,854 shares of Common Stock. Sales were the largest in the Company's history, being 17% greater than the previous year. In July of this year, the Company sold $5,236,300 of its Preferred Stock to a group of banks and insurance companies. It was considered advisable to provide these additional funds for working capital and expansion of plant facilities. The inventoiy has been valued at cost or market prices, whichever was the lower. For several years a reserve was set up to reduce prices still lower, to those prevailing in 1945 with respect to certain raw materials. Last year this reserve amounted to $1,523,000, but at the end of this year, market prices of oils, which constituted the major portion of the inventories covered by the reserve, so closely approximated those of 1945 that the remaining differences in prices were not material. It was, therefore, decided to discontinue this plan, especially as no tax benefit was obtained by it. S-W 0002 Since the introduction last year of our new product "Super KemTone", we have sold over ten million gallons of this deluxe washable interior wall paint. Our nationally advertised enamel "Kem-Glo'\ which was introduced to the public in 1949, likewise has had a most enthusiastic market reception. During August of this year we filled our twenty millionth can of this outstandingly fine quality enamel. About four million dollars were spent at the Company's various plants for modernization and for increasing our productive facilities. A new printing plant has been built at North Olmsted, Ohio, replacing the old one, which had been in use for over fifty years. This new unit will insure an adequate supply of color cards, advertising features, etc., to take care of our expanding volume. We are also increasing, under Certificate of Necessity, our production of Para Cresol, which product is important in the defense program and is used as an additive to gasoline for airplanes, automobiles, etc. Para Cresol is also an im portant basic ingredient in the manufacture of certain colors. The Government's rearmament program is developing a gradually tightening raw material situation. Some of our most important raw materials, such as tin plate, zinc, lead, titanium, phthalic anhydride, certain colors and many chemicals are under allocation or restriction by Government Directives. Our research and technical staffs are constantly at work developing new and better products for the home, farm and industry and are not only making the most of the available raw materials but have formulated from new raw materials many superior finishes which have proven their merit over years of severe laboratory testing tech nique. Many highly technical protective finishes have also been worked out and approved by Government Engineers for use in the Defense Program. Once again I desire to thank our staff in our plants, branches and offices for their loyalty and enthusiastic support in promoting the interests of the Company. S-W 00025 CONSOLIDATED. PROFIT AND LOSS AND SURPLUS THE SHERWIN-WILLIAMS COMPANY AND CONSOLIDATED SUBSIDIARIES Year Ended August 32, 1951 PROFIT AND LOSS Profit from operations for the year ended August 31, 1951, before other income, provision for depreciation and other deductions, and federal taxes on income. $22,582,568.23 Other income; Cancellation of allowance to reduce certain inven tories to last-in, first-out basis--Note A.............. $1,523,000.00 Dividends received on capital stock of unconsoli dated subsidiaries--Note B....................... ......... 270,718.29 Miscellaneous............. ............... ............. .................... 76,128.50 1,869,846.79 Deductions: $24,452,415.02 Provision for pensions...................... $2,300,000.00 Provision for depreciation.......... 1,849,473.47 Provision for foreign taxes and miscellaneous items. 515,310.70 Net charge arising from sale or abandonment of depreciable assets........................................ 161,014.50 Interest expense........ ................................................. 116,361.19 Federal taxes on income: Provision for the year (based on the Revenue Act of 1951) estimated: Normal tax and surtax....... $ 9,444,500.00 Excess profits tax................ 1.100.500.00 $10,545,000.00 Adjustments for prior years.... 580.293.58* 9.964,706.42 14,906,866.28 NET PROFIT............................................................ s$ss9s,s5a4s5s,5s4ss8s.7s4a EARNED SURPLUS Balance at September 1. 1950............. Add net profit for the year.................................... $41,533,293.24 9.545.548.74 Deduct: Cash dividends declared and paid or provided for during the year: Preferred--$4.00 per share... $ 302,378.55 Common--$3.50 per share... 4,472.489.00 $4.774,867.55 $51,078,841.98 Premium on preferred stock called for redemption. 24,750.00 4,799,617.55 BALANCE AT AUGUST 31,1951..... ........ $46,279,224.43 Note A--Reference is made to Note A to the consolidated balance sheet. Note B--Equity jn net profit for the year ended August 31, 1951, reported by unconsolidated subsidiaries was approximately $1,550,000.00 more than dividends received. Note C--The profit and loss accounts of the consolidated foreign subsidiarira have been translated into U. S. dollars mainly on the basis of rates of exchange in effect at the close of the year. * Indicates red figure. ? 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S' > O OS 3o 3H r o-o g EH a. g--'5 3 8 3s -s,-3 T'-O t-tN 03i.S Me-3 ` 3 8 H** SE8m s0r. 813. 33 rt "* 2 0 a3a'-c> > oen *a 3 o 5" 3: fl>sa '^2- 2E2ft-- ft S vo 0 S53- 7ft3 2. ft 0 2^ Rco 'gCL : 3 79"N **f3t*. 3 ft T" S* $ "3 r 30 L ^74 -- Ns9j V^O TLo. vo <r. <Ts N> bpO s tvS ____ 7* .SC 2.8 p U<JLNN- f SN^J3 7O74 7U4l O OO O booo vOOP 9Q *. : r- o * Cl - e 74 c 7N45 z2 4bk. 8 74 mm 4^. tsS 74 C9N3\ V*v}j 74 9 p 9900 GO*OV. 74 000^. s v} 4k. 74 7Cl4 900 7V4l b4k CvSj 74 74 0_0 O u 900 9 CO 77v44* b--Vj VO UN 9 00 o 7K45 Ub> a C=3 CA X ?9 z: M c- r o >o 3 2J CA. CA O' o o a > "0 >H 25 C=3 a > 2! a > r O >. O 25 oO 25 P3 .' oo CA r0 ffi *-4 P3 P3 a H > H w D OA a w CA (--4 a M > ys M H oo S-W 00025S 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 31, 1951, and the related statements of consolidated profit and loss and surplus for the year then ended. Our examination was made in accord ance 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 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, 1951, and the consolidated results of their operations for the year then ended, in conformity with generally ac cepted accounting principles which, except for the change (approved by us) in pricing certain inventories, referred to in Note A to the consolidated balance sheet, have been applied on a basis consistent with that of the preceding year. Cleveland, Ohio October 20, 1951 ERNST & ERNST Certified Public Accountants S-W 000259 Th e Sh e r w in -Wil l ia ms Co . 101 Prospect Ave., N. W. . Foundd in 1866 Cleveland, Ohio Manufacturers of Paints, Varnishes, Colors, Stains, Enamels, Lacquers, Lead Products, Dyes, Chemicals, Lithopone, Litharge, Linseed Oil, Dry Colors, Cans, Insecticides, Herbicides, Cleaners, Polishes. Main Plants Cleveland * Chicago - Dayton - Detroit - Newark - Pittsburgh Hubbard, Ohio - Oakland, Cal. Bound Brook, N. J. Gibbsboro, N. J. Dallas - Los Angeles - Coffeyville, Kan. A. D. BALDWIN C. S. EATON M. J. FORTIER GEORGE GUND Directors C. P. JARDEN D. A. KOHR C. M. LEMPERLY G. H. ROBERTSON L. H. SCHROEDER A. W. STEUDEL H. D. WHITTLESEY THOS. E. WILSON L. W. WOLCOTT Officers A. W. STEUDEL, President M. I. FORTIER. Viet President S. B. COOLIDGE. Viet President ' C. M. LEMPERLY. Viet PrerUent L. H- SCHROEDER. Viet President and Treasurer N. E. VAN STONE, Viet President H. D. WHITTLESEY, Vice President F. J. SQUIRES. Secretary Transfer Agents CLEVELAND TRUST COMPANY Clmlud, Ohio BANKERS TRUST COMPANY No t . York, N. Y Registrars CENTRAL NATIONAL BANK Ctmlui Ohio GUARANTY TRUST COMPANY N.w York, N. Y.