Document G6aoEzjZ10bOegxEwgvwxQMax

RILEY STOKER CORPORATION 1965 ANNUAL REPORT R8-0011Q8 1/17/02 NUECES Officers and Directors DIRECTORS Fred H. Daniels Honorary Chairman Louis E. Griffith Chairman Robert K. Griffith Chapin Riley Robert S. Bowditch Philip R. Mather Richard J. Rutherford Bruce G. Daniels Ellis T. Knobloch OFFICERS Louis E. Griffith Chairman, Vice President and General Manager Robert K. Griffith President and Treasurer Henry H. Michelsen Vice President -- Sales Henry H. Hemenway Vice President -- Engineering Ellis T. Knobloch Vice President Alexander L. Mitchell Vice President -- Chicago Office Kathleen M. Crooks Secretary Our Cover--Strikingly beautified by colorful porcelainized lagging and impressive in their performance are the two Riley Boilers at Tracy Station near Reno, Nevada. They provide a dependable steam gen erated power supplement to Sierra Pacific Power Company's hydro and diesel output. Carolina Power & Light Company has three Riley Steam Generating Units operating at three separate generating stations. This is ypit No. 1 at Skyland Station at Asheville, N. C. The three units produce more than five and one-half million pounds of steam per hour. All are equipped with Riley pulverizing mills and burners. Financial Highlights Sales (Billings) Net Earnings before Federal Taxes Net Earnings after Federal Taxes Net Earnings Per Share before Federal Taxes Net Earnings Per Share after Federal Taxes Cash Dividends Per Share Net Worth Net Worth Per Share Shares Outstanding Expenditures for Plant and Equipment Working Capital- 1965 $47,645,518 (615,037) (631,128) (1.57) (1.61) 1.60 17,019,655 43.53 391,014 722,306 12,766,460 1964 $42,164,562 1,712,134 783,153 4.38 2.00 1.60 18,263,530 46.71 391,014 858,973 13,542,067 1963 $33,838,166 1,881,017 1,071,412 4.81 2.74 1.60 18,089,690 46.26 391,014 876,050 13,461,610 1962 $37,183,878 682,873 469,633 1.75 1.20 1.60 17,638,393 45.11 391,014 443,660 13,920,809 1961 $43,286,888 3,184,800 1,521,689 8.14 3.89 1.60 17,795,032 45.51 391,014 1,049,163 14,004,035 In the foreground is one of Riley's new OD Boilers as it nears completion at Kaiser Aluminum and Chemical Company, Baton Rouge, Louisiana. Three Riley Turbo Furnace Boilers installed in previous years are also shown. RS-001110 1/W02 NUECES 2 To Our Shareholders Comparative results of our consolidated operations for the years of 1965, 1964, 1963,1962 and 1961 are summarized on page 2. Despite profitable operations by all other divisions in 1965 a substantial loss by the Badenhausen Corp. division resulted in a consolidated loss of $631,128 after taxes for 1965. Continued high cost of producing new designs for major components of steam generator units combined with expensive past practice work procedures are largely responsible for the disappointing results of Badenhausen Corp. division operations. To accomplish acceptable results in the operation of the Badenhausen Corp. division appropriate changes have been made in Plant Management and Supervisory Personnel and a three year labor relations contract, which elimi nates many expensive past practice production procedures, has recently been negotiated with the United Steelworkers Union. In addition our cost reduction program has been further intensified and all production methods are being evaluated and analyzed for potential im provement. In 1965 expenditures for additions and improvements to wholly owned property and facilities totaled $722,306. Financial figures given in this report do not reflect the effect of Engineer ing Fees not received from our Licensees. Such Engineering Fees, totaling approximately $2/100,000, are baaed on contracts sold by our Licensees and the Engineering Fees involved will be paid to us in the same ratio as our Licensees receive contract payments from customers. The consolidated backlog of unfilled orders on December 31, 1965 was $82,655,231 and on February 1,1966 was $87,980,972. With a substantial backlog of unfilled orders for all divisions, an antici pated improvement in the operations of the Badenhausen Corp. division and many capable associates, your Management is dedicated to making a significant improvement in the results of our operations in 1966. The cooperation of our customers, shareholders, loyal employees and sup pliers is acknowledged with appreciation and thanks. By Order of The Board of Directors L. E. Griffith, Chairman February 15, 1966 R. K. Griffith, President 3 R8-001111 1/17/02 NUECES RI LE V i Consolidated Balance She* ASSETS Current Assets Cash................................................................................ Marketable Securities at Cost (Market Value $5,234,283.50) Notes and Accounts Receivable--Trade, Less Allowance of $37,647.33 for Doubtful Accounts .. Other .............................................................................. Inventories of Materials and Supplies (At Lower of Cost or Market) .............................. Costs of Uncompleted Contracts in Excess of Related Billings...................................... Engineering in Process .............................................. Advances to Salesmen, Erectors and Others............ Prepaid Expenses ........................................................ Total Current Assets.................... ............. Other Assets Stock of Other Corporations--At Cost.................... Notes Receivable--Trade, Maturing After1966 .... Fixed Assets Land .............................................................................. Buildings........................................................................ Machinery and Equipment.......................................... Less: Accumulated Depreciation.............................. Buildings and Machinery Under Construction........ Patents--At Cost Less Depreciation $13,308,744.22 828,795.85 .. . . . . $ 13,943.13 326,578.67 $ 404,753.46 5,404,677.01 7,403,357.05 $13,212,787.52 8,140,019.65 $ 5,072,767.87 23,489.20 $ 600,020.57 5,565,764.29 14,137,540.07 6,533,218.12 1,667,807.80 570,359.81 314,334.28 286,128.85 $29,675,173.79 340,521.80 5,096,257.07 1.00 $35,111,953.66 NOTES TO FINANCIAL STATEMENTS Note A--Basis of Consolidation--The consolidated financial statements include the accounts of the Company and all subsidiaries (each of which is wholly owned). Intercompany items and transactions have been eliminated in the consolidated figures. Note B--Depreciation--For financial reporting purposes and for Federal Income Tax purposes, depreciation is provided for by the straight line method and by the declining balance method, based upon esti mated useful lives of the assets. 5 Nuec* ecember 31, 1965 LIABILITIES Current Liabilities Notes Payable to Banks.......... Accounts Payable...................... Customers' Advances .............. Accrued Liabilities Payroll .................................. Commissions .................. State and Other Taxes.......... Retirement Plan .................... Other .............................. Total Current Liabilities $ 6,600,000.00 3,326,491.95 4,962,730.61 $ 225,574.01 498,300.32 569,494.75 506,252.35 219,869.90 2,019,491.33 $16,908,713.89 Reserves Building: Fund Contingencies Expenses .... $ 200,000.00 150,000.00 1,033,585.16 1,383,585.16 Stockholders Equity Capital Stock--Common, Par Value $3.00 Per Share Authorized--1,050,000 Shares Issued and Outstanding--391,014 Shares............ Capital Surplus (No Change During the Year) .... Retained Earnings....................................................... Total Stockholders' Equity ........................... $ 1,173,042.00 1,444,497.05 14,202,115.56 16,819,654.61 $35,111,953.66 NOTES TO FINANCIAL STATEMENTS Note C--Bonus Profit Sharing Plans--The Company has bonus profit sharing plans under which distribution is made in the following year to a selected list of employees of the Corporation as approved by the Board of Directors. The total payment is computed by a formula on the basis of the year's income. The total accrual charged to 1965 operations is $12,000, payable to participants of a subsidiary. Note D--Retirement Plans--Accrued Retirement charged to 1965 operations is $506,252.35. RS-001114 1/17/02 NUECES RI LE V Consolidated Statement of Application of Funds For The Year Ended December 31,1965 Funds Expended Dividends Paid.................................................... Additions to Plants, Equipment and Facilities Total Funds Expended.......................... $ 625,622.40 722,305.63 $ 1,347,928.03 Funds Provided Depreciation .............................................................. Increase in Reserves................................................ Less: Net Loss for the Year.......... $ 631,128.30 Gain on Sale of Assets.......... 7,756.80 Proceeds from Sale of Assets...................................... Decrease in Long-Term Notes Receivable................ Adjustment of-Prior Years' Federal Taxes.............. Total Funds Provided...................................... Decrease in Working Capital Changes in Working Capital for the Year Increase in Notes Payable............................................................ Customers' Advances .............................................. Retirement Plan........................................................ Other Liabilities ...................................................... Decrease in Marketable Securities.............................................. Less: Increase in Accounts Receivable.................$2,720,095.54 Inventories .............................. 874,865.96 Other Assets............................ 120,044.05 Decrease In Accounts Payable....................$ 780,464.67 Federal Taxes on Income........ 862,183.32 Decrease in Working Capital $ 648,469.53 137,045.38 $ 785,514.91 638,885.10 $ 146,629.81 10,454.50 404,844.25 10,392.28 $ 572,320.84 $ 775,607.19 $ 4,250,000.00 814,424.84 506,252.35 208,509.34 354,074.20 $ 6,133,260.73 $3,716,005.55 1,642,647.99 5,357,653.54 $ 775,607.19 To The Board of Directors Riley Stoker Corporation 9 Neponset Street Worcester, Massachusetts Gentlemen: We have examined the consolidated balance sheet of Riley Stoker Corporation and subsidiary companies as of December 31, 1965 and the related consolidated statements of income and retained earnings for the 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 our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income and retained earnings present fairly the financial position of Riley Stoker Corporation and subsidiary companies at December 31. 1965 and the results of their operations for the year then ended, in conformity with generally accepted accounting principles ap plied on a basis consistent with that of the preceding year. Worcester. Massachusetts February 7. 1966 George A. Smith and Company Certi,ied Public Accountants RS-001116 1/17/02 NUECES 1965 Highlights Manufacturing The total capital investment of $722,306 in 1965 included expenditures for cost reduction equipment at our Detroit, Badenhausen Corp oration, A. W. Cash Company, and Union Iron Works plants. Recently authorized capital expenditures included the installation of two additional electric melting furnaces which will substan tially reduce the cost of foundry operations at our Detroit plant. These capital expenditures are the con sequence of a continuing cost reduction pro gram with particular emphasis on all areas of the Badenhausen Corp. division opera tions. Sales Total consolidated sales volume of new con tracts closed in 1965 substantially exceeded total new sales volume closed in 1964 and in cludes increased new sales volume by all di visions. Current inquiries reflecting the expan sion of our national economy indicate that the volume of new business available to our industry will continue at a high level in 1966. A Riley 250,000 ibs/hr Turbo Furnace Boiler installed at Marathon Oil Company at Detroit. Michigan. This boiler is fired by oil and refinery by-product fuels--CO gas and fluid coke--and is equipped with Riley Ball Tube Mills. f/trRS401119 /02 Nueces nr fiir Brief History of the Company Riley Stoker Corporation was incorporated under the laws of the Commonwealth of Massachusetts in 1913. Its wholly owned subsidiaries, included in the within Consolidated Financial Statement, are Badenhausen Corporation and Union Iron Works, both incorporated under the laws of the Common wealth of Pennsylvania, and A. W. Cash Com pany, incorporated under the laws of the state of Delaware. The principal business of Riley Stoker Corporation and its subsidiaries, Badenhausen Corporation and Union Iron Works, is the design, manufacture, sale and erection of steam generat ing and fuel burning equipment, with the electric utility industry accounting for more than 80% o its sales. Prior to 1D60 the Company's Badenhausen Corporation plant manufactured all of its steam generating equipment which included high tem perature, high pressure . steam generators, re heaters, superheaters (convection, radiant), air heaters, economizers, steel clad settings, water cooled furnaces, CO boilers. In 1960 with the acquisition of Union Iron Works, the Riley line of products was comple mented by the following Union products sold in the same general market: package boilers, low pres sure boilers, waste heat boilers, high temperature hot water heaters, thermal liquid heaters, process equipment, vaporizers for organic fluids, forced circulation heaters, welded fabricated steel, auto claves. The Company's fuel burning equipment is manufactured at its Detroit, Michigan plant and includes coal pulverizers, spreader stokers, travel ing grate stokers, oscillating grate stokers, coal, oil and gas burners, multiple retort stokers, single retort stokers, refuse fuel burning equipment, bagasse burning stokers. A. W. Cash Company manufactures and sells pressure and temperature regulating valves, com bustion control equipment and missile loading valves. The locations of the Company's manufactur ing plants, sales offices, licensed manufacturing associates and overseas agents are set forth on the back cover of this report. v Five MH Package Steam Generators made up this shipment to a Gulf Oil Company refinery in Louisiana. The trip started out by rail and fin ished by barge via the Ohio and Mississippi RILEY BOILER USERS (Partial List) * ^. y. 1CW fue! burning system developed by Riley for burning bagasse is helm? ,, w*th Rijey-Union boilers in sugar mills in every major sugar-producing area in the wartei *a ^pical installation Is th^ two 120.000 Ibs/hr Riley boilers, above operating for the Suear Can Growers Cooperative of Florida at'Belle Glade. p* 8 Tor ine Cane PUBLIC UTILITIES Arizona Public Service Co. Carolina Power A Ught Co.* Central Power & light Co. Kansas Gas & Electric Co.* Holyoke Water Power Co.* Minnesota Power A Ught Co.* Eastern Iowa Light A Power Co. Philadelphia Electric Co.* Louisiana Power A Ught Co.* Texas Electric Service Co.* Public Service Company of Indiana, Inc. Arkansas Power A Ught Co. Utah Power A Light Co.* Columbus A Southern Ohio Electric Co.* Central Illinois Light Co.* Houston Lighting A Power Co.* South Carolina Electric A Gas Co.* Union Electric Co. of Missouri* Nevada Power Co. Commonwealth Edison Co. Florida Power Corporation* Dallas Power A Light Co.* Monongahela Power Co. The Potomac Edison Co.* Delaware Power A Light Co. Massachusetts Electric Co. Southwestern Gas A Electric Co. Northern States Power Co. Central Louisiana Electric Co.* Gulf Power Co.* Sierra Pacific Power Co.* Pennsylvania Electric Co. Iowa Electric Light & Power Co.* Montana-Oakota Utilities Co.* Mississippi Power Co.* Ohio Edison Co.* Iowa Public Service Co.* Interstate Power Co.* Pacific Gas A Electric Co.* Southern Indiana Gas A Electric Co.* Upper Peninsula Power Co. New Orleans Public Service Inc.* Northern Virginia Power Co. lowa-lllinois Gas A Electric Co.* West Penn Power Co. Upper Michigan Power A Light Co.* ,__ _ Superior Water, Light A Power Co. The Cliffs Power A Light Co. Otter Tail Power Co.* North Dakota Power A Light Co. The Hartford Electric Light Co. Taiwan Power Co.* Community Public Service Co. Wisconsin Electric Power Co. West Texas Utilities Co.* Fitchburg Gas A Electric Co. The Detroit Edison Co. Manila Electric Co.* Tampa Electric Co.* San Diego Gas A Electric Co. Southwestern Power Co. Salt River Power Oistrlct* 8oston Edison Co. Louisville Gas A Electric Co. Georgia Power Co. Alabama Power Co. INDUSTBIALS General Motors Corp.* Ford Motor Co.* Celanese Corporation* Great Atlantic A Pacific Tea Co.' Boise Cascade Corp.* The Dow Chemical Co.* Deere A Company Esso Standard Oil Co.* Standard Oil of Calif.* Bethlehem Steel Corp. U. S. Steel Corp.* Republic Steel Corp.* Marathon Southern Corp. The Texas Co. Shell Oil Co.* Tidewater Oil Co. The Champion Paper A Fibre Co. W. Va. Pulp A Paper Co.* Gaylord Container Corp.* Olin-Mathieson Chemical Corp.* B. F. Goodrich Company* Union Carbide Chemical Co.* Continental Can Co.* Kennecott Copper Corp.* Hooker Chemical Corp.* Swift A Co.* Western Electric Co.* E. I. duPont de Nemours A Co.* U. S. Rubber Co.* A. E. Staley Mfg. Co.* Crocker Burbank A Co., Ass'cn. St. Regis Paper Co.* Masonite Corp.* Humble Oil and Refining Co.* American Enka Corp.* Commercial Solvents Corp. American Viscose Corp.* Monsanto Chemical Co.* Rayonier, Inc.* Westinghouse Electric Co.* General Electric Co.* Northern Ohio Sugar Co. Crucible Steel Corp. of America Gulf States Paper Co. Campbell Soup Co. Pennsylvania Railroad* SL Croix Paper Co.* GUdden Co.* international Harvester Co.* Allis Chalmers Mfg. Co.* Norton Co.* Pratt A Whitney Oiv. of United Aircraft* Publicfcer Industries, Inc.* McDonnell Aircraft Corp.* Mead Corporation* Great Lakes Steel Corp.* General Foods Corp.* American Brass Co.* American Smelting A Refining Corp. Freeport Sulphur Co. Kaiser Aluminum A Chemical Corp.' Celotex Corp. The Charmln Paper Products Co. Bryant Sugar House* Alton Box Board Co.* Marathon Oil Co. Shell Chemical Co.* Diamond National Corp.* Emery Industries, Inc. Strathmore Paper Co. Koppers Co., Inc.* Upjohn Company* C. H. Dexter A Sons, Inc. American Oil Co. Barber Colman Co. Standard Brands, Inc. P. H. Glatfelter Co. Hormel A Co. Weyerhaeuser Corp. Remington Rand Co.* Archer-Oaniels-Midland Co.* Penn Station Housing Project Copperweld Steel Co. Libby, McNeill A Libby* Naugatuck Chemical Co. Morgan Packing Co. Toledo Edison Co. Holy Cross College* Suntide Refining Co. Tobin Packing Co. R. J. Reynolds Tobacco Co.* Carnation Company* Chrysler Corporation* Firestone Tire & Rubber Co.* Chevrolet Motor Division* American Chemical Co.* Wyckoff Steel Co.* Atlantic Refining Co. H. J. Heinz Co. Anheuser-Busch, Inc. The Hilton-Oavis Chemical Co. The American Tobacco Co. Corning Glass Co. U. S. Plywood Corporation Shell Oil Co.* General Electric Co. United Rubber A Chemical Co. Utah-Idaho Sugar Co.* Indiana State College Knox College Southampton Penitentiary Farms Norwich University Rikers Island Penitentiary Miles Chemical Co. National Bureau of Standards Pond Lily Co. Nicholson File Co. Great Lakes Steel Div. National Steel Corp. Hercules Powder Co.* Buckeye Sugars, Inc. Hudson Pulp A Paper Co. Antilles Chemical Co.* Rochdale Village, Inc. Bucyrus-Erie Co. Johns-Manville Products Co.* Reynolds Metals Co. Torrlngton Company* The Budd Company Ingersoll Rand Co. Thomas J. Upton Co., Inc. Holly Sugar Co.* American Smelting A Refining Co.* Swift A Co. Mohawk Paper Mill. Inc. Container Corporation of America* Florida Sugar Corp. Kohler Company General Aniline A Film Corp. Princeton University Sugar Cane Growers Coop* Goodyear Tire A Rubber Co.* Geigy Chemical Co. Hunt Foods and Industries Georgia Pacific Corp. Cooper Tire and Rubber Co. Chemstrand Co. Eastman Kodak Co. National Steel Corp. Great Western Sugar Co. Brown A Williamson Tobacco Co. Gulf Oil Corp.* Borden Chemical Co. The Boeing Co. Continental Oil Co. Spreckles Sugar Co. Ervin* PaperVllis RS-001118 U.S. Gypsum 1/17/02 'Repeat Orders NUECES OPERATIONS DIRECTORY Manufacturing Plants in the United States Detroit, Michigan Riley StokerCorporation Division Erie, Pa. Union Iron Works Division Cornwells Heights, Pa. * 8adenhausen Corporation Division Decatur, Illinois A. W. Cash Co. Oivision Union Iron Works Badenhausen Corporation Detroit Division Central Offices--Worcester SALES OFFICES--Albuquerque, Atlanta, Boston, Charlotte, Chi cago, Cincinnati, Cleveland, Detroit, Denver. Honolulu, Houston, Jacksonville. Kansas City, Los Angeles, New Orleans, New York. Philadelphia, Pittsburgh, Portland, Salt Lake City. San Francisco, Seattle, St. Louis, St. Paul, Syracuse, Washington. Licensed Manufacturing Associates JOHN BROWN LAND BOILERS, LTD. Steam Generating and Fuel Burning Equipment British Commonwealth of Nations (Except Australia, New Zealand, Canada, India, Pakistan) Steam Generating Equipment Europe (Except Belgium, Luxenbourg, France, Spain, Portugal and their possessions) FOSTER WHEELER LIMITED Steam Generating and Fuel Burning Equipment Canada OISTRAL LTDA. Republic of Columbia Products of Union Iron Works Division RILEY DODDS AUSTRALIA, LIMITED Steam Generating and Fuel Burning Equipment Australia and New Zealand FAMA, Stokers -- Europe, Cambodia, Turkey and Viet Nam CHAUDRONNERIES PIERRE BROUHON Steam Generating Equipment Belgium, Congo, Grand Duchy of Luxembourg SOCIETE D'EXPLOIATION O'USINES METALLURGIQUES Steam Generating Equipment and Gas, Oil, Coal Burners France, Spain, Portugal and their possessions Overseas Agents COLUMBIA C. E. Halaby & Co., Ltd. URUGUAY J. Felix Castillo, Jr. VENEZUELA Ortiz & Mejia C. A. MEXICO Construcciones Oe Ingenieria Electrics Y Mecanica, S.A. INDIA G. S. Atwal & Co. VIET NAM AND CAMBODIA Brownell, Lane Inti. Ltd. PAKISTAN Interhom Ltd. KOREA Joongwon & Company, Ltd. GREECE John T. Dontopoulos KINGDOM OF DENMARK Thomas Schmidt TAIWAN The Suiki Enterprise Co., Ltd. PHILIPPINES Atlantic Gulf and Pacific Co. of Manila, Inc. ARGENTINA Sociedad Argentina Tecnica Industrial y Comercial, S. A. PUERTO RICO AND DOMINICAN REPUBLIC Abarca Warehouses Corp. ISLAND of MAURITIUS Rey & Lenferna, Ltd. CHILE Racontec Ltda. TURKEY Sinai Tatbikat T.A.S. R8-001119 1/17/02 NUECES