Document JvrGDBmG4M85V4RzEoXpxyyM6

Annual Report 1952 s-w 000262 Th e Sh e r w in -Wil l ia ms Co . A. W. STEUDEL PRESIDENT 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, 1952. The earnings before Federal Income Tax and provision for the Pension Plan are $19,489,107.34. The amount estimated for Federal Income and Excess-Profits Tax is $7,874,084.86. For the Pension Plan $2,000,000 has been set aside this year. The final consolidated net earnings after all deductions are $9,615,022.48. These net earnings, after allowing for Preferred Dividends, are equivalent to $7.12 per share on the present outstanding 1,277,854 shares of Common Stock. Sales were larger than any previous year in the Company's history and exceeded those of last year by 1.3%. Trade sales--that is, sales of consumer products--were substantially greater than last year. The gain in this main part of the Company's business is responsible for the over-all increase over last year and helped to offset a decline in volume in the industrial field as well as in the Pigment and Chemical Division. The drop in production of industrial items such as auto mobiles, furniture, refrigerators, television sets and home appliances necessarily brought with it a reduced demand for industrial finishes. The steel strike and other strikes contributed to this to some extent but, as is well known, there was a considerable slackening in the buying of these products by consumers throughout the country. Referring to the Pigment and Chemical Division which sells princi pally to manufacturers such basic materials as pigments, cans, colors, dyestuffs, intermediates and chemicals, this section of the business also suffered because manufacturers were cutting down their pro duction on account of reduced sales. On the other hand, the public demand for finishes for the home exceeded by far all previous records. S-W 000263 This applies particularly to two of our products, namely, Super Kem-Tone and Kem-Glo. Super Kem-Tone has the largest acceptance of anv wall paint on the market, and Kem-Glo likewise is the leader in its field as the highest quality enamel for kitchens, bathrooms and woodwork. Expenditures for plant, were made during the year to increase and improve the Company's production facilities throughout its various units without any outstanding investment that would call for specific mention. No project of major importance is now contemplated. In June of this year the Company sold an additional $4,995,000 of its Preferred Stock to a small group of banks and insurance com panies. This brings the Company's Preferred Stock up to $16,500,000 as shown on the balance sheet, which was the amount the Company once had outstanding some years ago. Inasmuch as the Preferred Stock agreement required an annual redemption of 3% of the largest amount it once had previously outstanding, $495,000 has been called each year ever since then. For the same reason no increase in this annual redemption is necessary. A reduction of approximately $10,000,000 was made in the Com pany's inventories since a year ago. This, together with the $4,995,000 new capital through sale of Preferred Stock, has resulted in building the Company's cash position to $28,707,050, which is about $2,100,000 in excess of all its liabilities. The management expresses its appreciation to the organization for the loyal and efficient efforts that have made this year's results possible. President CONSOLIDATED PROFIT AND LOSS AND SURPLUS THE SHERWIN-WILLIAMS COMPANY AND CONSOLIDATED SUBSIDIARIES Year Ended August 31, 1952 PROFIT AND LOSS Profit from operations for the year ended August 31, 1952, before other income^ provision for depre ciation and other deductions, and federal taxes on income... . . ........ .............. $21,614,542.06 Other income: . Adjustment of excess insurance charges in prior years, less estimated federal taxes on income. ... $ 514,821.54 Dividends received on capital stock of unconsoli dated subsidiaries--Note A................... 236.452.65 Miscellaneous. .............. 222.161.37 973,435.56 $22,587,977.62 Deductions: Provision for depreciation.......................................... $2,070,851.14 Provision for pensions................................................ 2,000,000.00 Provision for foreign taxes and miscellaneous items 754,843.52 Interest expense.......................................................... 208,022,32 Net charge arising from sale or abandonment of depreciable assets.................................... 65,153.30 i Federal taxes on income: Provision for the year--estimated: Normal tax and surtax............. $8,350,000.00 Excess profits tax....... ............. 400,000.00 $8,750,000.00 Adjustments for prior years.------ 875.915.14* 7,874,084.86 12.972,955.14 NET PROFIT............................................ $ 9.6I5.022A8 EARNED SURPLUS Balance at September 1, 1951....................................... Add net profit for the year........................................ $46,279,224.43 9.615,022.43 Deduct: $55,894,246.91 Cash dividends declared and paid or provided for during the year: Preferred--$4.00 per share........ $ 520,519.47 Common--$3.50 per share........ 4.472.489.00 $4,993,008.47 Premium on preferred stock redeemed.................... 24,728.43 5.017,736.90 BALANCE AT AUGUST 31. 1952.................... * Indicates red figure. $50,876.510.01 Note A:--Equity in net profit for the year ended August 31, 1952, reported bv unconsolidated subsidiaries was approximately $1,375,000.00 more than dividends received. Note B--The profit and loss accounts of the consolidated foreign subsidiaries have been translated into U. S. dollars mainly on the basis of rates of exchange in effect at the close of the year. *i 2 : a * a *: S |- 2! fSa, re c S nS i;T 3i *s a2* . ^ . 3? 2 ir 1 t an aQm **So a* 3` * a 2r S!>. s*o *2v2<-. 3 5 S 5- = . 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Cft/3 4 I ^3 re T* ft it 00 vj .8* Cn o -3 oo o vo cn K3 4ft to -- tn O' o 00 tn tn a\ sO to cn o vO tn to M - 00 o 0-- tn to N5 Cs to V| to m* vo 04 M GO OS o 00 o o v| tn Cs tn o to so mm to L04 o v| 4ft 04 OS o mm 00 tn pm cn SO- P3 CO 3 t=l ?c 9--* z: i r r n >O 2- z CO CO O O r1 C ' N-l.'. P3; H > PI z: O: H' 03 ` > > az r-' > Z o o o :P3 z co co O ffi r pi h >H H: P3 a CO G to CO > i iGs-w 0002 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, 1952, and the -elated 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, 1952, 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 13, 1952 ERNST & ERNST Certified Public Accountants Th e Sh e r w in -Wil l ia ms Co . 101 Prospect AVC-, N. \V. Founded 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 - Coffeyvilie, Kan. A. D. BALDWIN C. S. EATON GEORGE GUND C. P. JARDEN Directors D. A. KOHR C M. LEMPERLY C. H. ROBERTSON L. H. SCHROEDER A. W. STEUDEL H. D WHITTLESE THOS. E. WILSON L. W. WOLCOTT Officers A. W. STEUDEL, Pruid.nl S. B. COOLIDGE, Vic. Pruid.nl C. M. LEMPERLY. Vic. Pruid.nl L H. SCHROEDER. Vie. Prwid.nl and Truuurw B. M. VAN CLEVE, V*. Pruid.nl N. E. VAN STONE, Vic. Pruid.nl H. D. WHITTLESEY, Vic. Prutd.nl F. J. SQUIRES, Surrtar. Transfer Agents CLEVELAND TRUST COMPANY CltTiUad Ohio BANKERS TRUST COMPANY Nnw York. N. Y. Registrars CENTRAL NATIONAL BANK Clivclud, Ohio GUARANTY TRUST COMPANY New York, N. Y. S-W Q00269