Document QJv528d9RVYLkoyoOg7mDzQ6

Saint Joseph Lead Company Annual Report -- 1932 America's Corporate Foundation; 1932; ProQuest Historical Annual Reports Pg- 1 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST, JOSEPH LEAD COMPANY Incorporated March 25, 1864, under the Lam I the State of New York Daniel K. Catlin, St Louis, Missouri Hendon Chubb, of Chubb & Son Irwin H. Cornell, Vice President Clinton H. Crane, President Firm in V. Desloge, St Louis, Missouri BOARD OF TRUSTEES Clinton H. Crane Chairman Andrew Fletcher, Vice President and Treasurer James H. Grover, , , Pres., St Louis Union Trust Co. Fred W. Shibley, Vice Pres., Bankers Trust Co. Hon. E. C. Smith, St Albans, Vermont M. F. Watts, of Watts & Gentry, St. Louis EXECUTIVE OFFICERS Irwin H. Cornell, Vice Pres., and Sales Manager Andrew Fletcher, Vice Pres., and Treasurer C. Merrill Chapin, Jr. Vice President Clinton H. Crane President H. B. McGown, Secretary Robert Bennett, Assistant Secretary George I. Brigden, Assistant Secretary STOCK TRANSFER OFFICE 250 Park Avenue, New York REGISTRAR City Bank Farmers Trust Company, New York BOND INTEREST and PRINCIPAL Payable at Messrs. J. P, Morgan & Company, New York Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST. JOSEPH LEAD COMPANY 250 Park Avenue, New York Gty PRESIDENTS ANNUAL REPORT TO STOCKHOLDERS To the Stockholders of the St, Joseph Lead Company: The following report covers the operations of your Company for the fiscal year ended December 31, 1932. Dividends In the year 1932 cash dividends to the amount of $292,56975 have been paid to the stockholders of the St. Joseph Lead Company as compared with $2,438,07975 in 1931 and $5,851,386.00 in 1930, no dividends were paid to minority stock holders in subsidiary companies in 1932 as compared with $14,61875 in 1931 and $128,865.00 in 1930. Comparative Production, Price, Sales, Stocks and Earnings The effect of the low metal prices and sales is reflected in the following comparative yearly figures: Year Total United States Lead Figures m tons Production, including secondary lead U. S. Shipments only--1932 estimated Stocks at end of year 1928 819,604 702,721 33,618 1929 817,721 727,271 54,900 1930 688,787 575,226 103,247 1931 478,591 398,637 151,380 1932 332,417 282,000 175,661 Price f.o.b. St. Louts Lead cents per lb. Zinc cents per lb. Production Tons of ore mined Tons of lead concentrates ^ Tons of lead content 100% basis Tons of zinc concentrates Tons of zinc content 100% basis 6.133 6.027 4,833,194 204,181 148,568 45,928 27,361 6.646 6.512 5.456 4.556 4.007 3.640 5,750,412 245,958 178,181 60,475 35,115 5,999,813 243,614 177,935 86,795 50,064 4,465,794 196,481 141,999 63,348 37,056 3.055 3.124 3,233,172 147,242 107,096 34,677 20,020 Pig Lead Sales, Including Lead Content in Concentrates Sold Tons of St. Joe production " Tons of Purchased lead sold 136,640 , r 52,342 Total 188,982 160,490 61,399 221,889 137,502 82,221 219,723 105,262 69,085 174,347 81,467 53,473 134,940 Lead Stocks in tons, including 90% of lead content in concentrates 16,271 22,042 51,107 77,134 . 93,990 Consolidated Earnings Profit from operations Deduct interest and expense on bonds $7,772,749.45 $11,883,617.03 $5,809,486.42 $1,974,485.73 $ 203,909.10 352,265.72 491,790.21 Gross Income Deduct Provision for Depreciation Federal Income Taxes $7,772,749.45 $11,883,617.03 $5,809,486.42 $1,622,220.01 $ 287,881.11 1,050,348.88 455,623.88 1,268,935.08 1,319,064.38 1,149,702.39 883,938.98 390,314.61 1,011,845.62 Total Deductions Net Income before Depletion Deficit $1,505,97276 $ 2,152,874.06 $1,709,378.99 $1,149,702.39 $1,011,845.62 $6,266,776.69 $ 9,739,742.97 $4,100,107.43 $ 472,517.62 *$1^99,726.73 During the year 1932 the amount charged against current earnings for the depletion of the ore reserves totaled $1,606,31078 in comparison with $1,886,589.04 in 1931, $2,566,469.67 in 1930, $2,264,740.04 in 1929 and $1,775,803.27 in 1928. This depletion piovision is based on production, whereas the earnings are based on sales. The production for 1932 was approximately 19% greater than sales, and the 1932 sales were about 21% less than 1931 and 40% less than in 1930. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Financial Condition ' The financial strength of the St. Joseph Lead Company is shown by the accompanying Comparative Consolidated Balance Sheet as of December 31, of each year. The ratio between current assets and current liabilities has increased from 726 to 1 in 1931 to 11.96 to 1 in 1932. The amount of company bonds now outstanding has been reduced through purchases to $8,000,000. The U. S. Government, State and Municipal securities owned as of the close of the year totalled $1,896,000, of which $1,700,000 U. S. Government securities and the $100,000 New York City Corporate Stock mature during 1933. A settlement has been effected with the Internal Revenue Department in compromise of the interest accrued on the additional taxes assessed and paid for the years 1921 through 1928. A compromise has also been secured covering the Company's 1929 claim for refund. The elimination of the disability feature in the Company's Group Life Insurance policy was necessitated, and also a change in the Pension Plan whereby the benefit was reduced from a minimun to a maximum of $30.00 per month after January 1, 1935 for those employees of age sixty-five, and with at least twenty-five years of service. Southeast Missouri On April 1, 1932 the operating basis was reduced from 60% to 50%, all wages and salaries were reduced an additional 10% following a similar additional reduction on March 1, 1932 in the salaries of the executives and employees of the New York Office. No further change occured during the year. On May 1, 1932 the Herculaneum smelter was dosed down and operations were not resumed until November 1, 1932, The shut-down expense has been included in the November and December costs. A 20% reduction was obtained in the real estate and personal property taxes, and it is expected that at least an additional 10% will be granted for 1933. . The diamond drilling and exploration work results have been encouraging. The Company's properties have been main tained in satisfactory condition. No construction expenditures were capitalized during the year. The general health of the community is excellent, and by reason of the wholehearted cooperation and loyalty of the entire organization, the costs are being maintained at relatively satisfactory levels. Josephtown, Pennsylvania The electro-thermic zinc smelter was operated throughout the year on a one furnance basis. Satisfactory progress has been made in the introduction of St. Joe oxides to the rubber and paint trades, and during the year interesting results have been obtained in the laboratory experimental work for the handling of the zinc residues from the furnaces, and in the development of new products. The acid output was slightly increased and the entire production sold. The construction expenditures capitalized during the year amounted to $18,868.87; all other expenditures and experiment al work were charged to cost of operations. Edwards and Balmat, New York On February 1, 1932 salaries and wages were reduced 10%, and on May 1st, the operating time schedule was reduced from 100% to 50%, which basis was in effect during the remaining months of the year. The 1932 output was approximately 3,128 tons per month in comparison with 5,279 for 1931, and the shipments 2,759 in comparison with 4,901 for 1931. The entire pyrite production was sold. The new Baimat shaft has been entirely completed, and the plans finished for increasing the mill from 500 tons to 1,000 tons per day, which program, however, will not be undertaken until general conditions will justify the increased output. The expenditures, amounting to $67,110.53, were capitalized. No Edwards expenditures were capitalized. Atlanta, Idaho Since the commencement of operations in February this small gold property has been operated on 100% time basis. The developed ore reserves indicate a life until about July 1, 1934. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Kansas and Block "P," Montana The Kansas Explorations properties in the Joplin Districts, as well as the Block "P" Mine at HughesviHe, Montana, have been maintained throughout the year on merely a watchman basis. Aguilar, Argentina ' The development program was entirely completed in August, the organization returned to the United States, and the mine reduced to a watchman basis. A comprehensive geological study has supported the previous calculation of tonnage and grade. Detailed estimates for a 400 or a 200 ton pilot mill and smelter have been made, with the thought that if world conditions do not soon improve the Aguilar Mine will probably be operated on the basis of merely supplying a portion of the Argentine requirements. Mine La Motte, Missouri This property which was closed down in March, 1931, was maintained throughout the year on a watchman basis. Number of Stockholders The number of stockholders increased to 5,360, and the comparative figures are as follows: Year 1932 1931 1930 1929 1928 1927 Number 5,360 5,063 4,493 4,025 4,183 3,684 Year 1926 1925 1924 1923 1922 1921 Number 3,239 2,629 2,335 2,402 2,351 2,258 The 5,360 in 1932 is divided into 1,584 stockholders owning less than 20 shares, 1,796 owning between 20 and 99 shares, 871 holders of between 100 and 199, and 1,105 owners of 200 or more shares each. Federal, Missouri, and Pennsylvania Tax Information The 1932 dividend distribution was paid entirely out of the surplus earnings of the Company, and we are advised by Counsel that such distribution is therefore subject to the Federal Surtax Rates. Inasmuch as the Company showed a net loss on its Missouri income tax return for the year 1931, and paid no income tax to the State of Missouri for that year, we are advised by Counsel that stockholders who pay income taxes to the State of Missouri for the year 1932 will not be entitled to take a credit on their income tax returns to the State of Missouri in respect to the dividend received from this company during that year. Such credit is allowed under the law only in the amount obtained by multiplying the rate of the Missouri State tax on corporate income by the amount or i portion of such dividends or net earnings upon which the company paid an income tax to the State of Missouri for its last preceding taxable year. Counsel also advise that residents of the State of Pennsylvania, who are holders of St. Joseph Lead Company stock are relieved from the Pennsylvania 4 Mills Tax on that stock by reason of the fact that the Company is registered and doing business in Pennsylvania, and is subject to corporate tax laws of Pennsylvania. Notice as to Voting Rights for Annual Meeting The Executive Committee has fixed the 31st day of March, 1933, as the day as of which stockholders entitled to notice of and to vote at the Annual Meeting shall be determined, and for the purpose of that Meeting, all persons who are holders of voting stock at the close of business on March 31, 1933, and no others shall be entitled to vote at such Meeting. Proxies for the Annual Meeting, which will be held on April 13, 1933, at the Principal Office, 250 Park Avenue, New York City, at eleven o'clock in the forenoon, will be mailed in due course. February 10, 1933 New York. CLINTON H. CRANE - President Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST. JOSEPH LEAD COMPANY AND SUBSIDIARIES Consolidated Balance Sheets, December 31, 1932, and December 31, 1931 ASSETS . Capital Assets: Ore reserves and mineral rights-- (March 1, 1913, appraised value plus subsequent ad ditions at cost, and including $948,652,45 apprecia tion arising from revaluation at December 31, 1932, and $1,239,512.99 at December 31, 1931) December 31, 1932 . $39,677,638.15 Less--Reserve for depletion 29,081,625.01 $10,596,013.14 Shafts and underground equipment (at cost) Less--Reserve for depletion $ 4,566,502.35 3,120,334.33 1,446,168.02 Land, buildings, plant and equipment (at cost) Less--Reserve for depreciation $20,314,410.75 8,402,060.72 11,912,350.03 Railway construction--cost being refunded 198,775.00 Total Capital Assets $24,153,306.19 December 31, 1931 $39,655,823.94 27,682,711.40 $11,973,112.54 $ 4,554,512.31 2,912,937.16 1,641,575.15 $20,232,187.65 7,409,671.89 12,822,515.76 207,055.00 $26,644,258,45 Investments and Advances: Aguilar Corporation (at cost--89% controlled) Mine La Motte Corporation (at cost--50% owned) Stocks of other mining companies (at market) Sundry securities and loans (at cost) $ 1,462,500.00 805,484.63 114,310.88 439,068.93 Current and Working Assets: Cash on hand and in banks Marketable securities ^ Notes and accounts receivable Materials and supplies (at cost) Inventories of lead, zinc, etc. (at cost or market, whichever is lower) $ 1,760,108.10 1,896,000.00 808,838.32 1,566,999.29 3,248,633.21 Deferred Charges: Unamortized debt discount and expense Prepaid insurance, taxes, etc. $ 214,658.25 133,308.28 2,821,364.44 11,280,578.92 347,966.53 $ 1,462,500.00 805,484.63 177,469.00 452,520.98 2,897,974.61 $ 2,450,603.97 2,026.000.00 1,598,417.15 1,738,681.68 5,092,299.50 12,906,002.30 $ 295,844.70 131,370.74 427,215.44 TOTAL $38,603,216.08 LIABILITIES Capital Stock: Authorized--2,500,000 shares of $10.00 each Issued 1,996,798 shares and 1,996,797 shares Less--In Treasury, 46,332 shares $25,000,000.00 $19,967,980.00 463,320.00 Net Scrip outstanding $19,504,660.00 428.50 $19,505,088.50 Minority Interest in Subsidiary Companies-- Capital stock and proportion of surplus applicable thereto ' 91,918.97 Bonded Indebtedness: St. Joseph Lead Company Ten Year Convertible 5J4% Gold Debenture Bonds due May 1, 1941 Less--Bonds in Treasury $ 9,752,300.00 1,752,300.00 Current Liabilities: Accounts payable Accrued wages Accrued interest on bonds in hands of public $ 829,792.24 40,220.83 73,333.33 Total Dividend of 15c a share declared December 21, 1931 payable March 21, 1932 $ 943,346.40 Deferred Credits-TM Unrealized profit from sale of houses, etc. 8,000,000.00 943,346.40 97,150.02 Reserve for Contingencies 832,177.31 Surplus TOTAL . 9,133,534.88 ' $38,603,216.08 $42,875,450.80 $25,000,000.00 $19,967,970.00 463,320.00 $19,504,650.00 438.50 $19,505,088.50 103,934.32 $ 9,752,300.00 1,185,000.00 8,567,300.00 $ 1,363,567.35 43,530.42 78,7.14.71 $ 1,485,812.48 292,569.75 1,778,382.23 126,367.61 766,821.10 12,027,557.04 $42,875,450.80 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission ST, JOSEPH LEAD COMPANY AND SUBSIDIARIES Summary of Consolidated Income and Surplu* For the Year Ended December 31, 1932 Profit from Operations (Before interest and expense on Bonds, Depreciation and Depletion) Other Income: Interest net Dividends Miscellaneous ' 73,427.26 2,725.00 4,277.08 Gross Income Deduct--Interest and expense on Bonds Loss Before Depreciation and Depletion Add--Provision for Depreciation Loss Before Depletion Add--Provision for Depletion , Net Loss Deduct--Proportion of net loss applicable to Minority Interests Loss for the Period $ 123,479.76 80,429.34 $ 203,909.10 491,790.21 $ 287,881.11 1,011,845.62 $1,299,726.73 1,606,310.78 $2,906,037.51 12,015.35 *$2394,022.16 Surplus, December 31, 1931 (Including surplus arising from revaluation of ore reserves and mineral rights, $1,239,512.99) Surplus, December 31, 1932 (Including surplus arising from revaluation of ore reserves and mineral rights, $948,652.45 12,027,557.04 $9,133,534.88 *Write-down of securities amounting to $63,158.12 has been charged against the Reserve for Contingencies. CERTIFICATE St. Joseph Lead Company: We have examined your accounts and those of your subsidiary companies for the years ended December 31, 1932 and December 31, 1931. The inventories of lead, zinc, etc., are valued at cost or market, whichever is lower, not including depreciation and depletion, and were not verified under audit as to quantities. In our opinion the accompanying Consolidated Balance Sheets and the Summary of Consolidated Income and Surplus set forth respectively, the financial condition of the companies at December 31, 1932, and December 31, 1931, and the results of their operations for the year ended December 31, 1932. HASKINS 8C SELLS New York, February 10, 1933. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ST. JOSEPH LEAP COMPANY PRESIDENT'S ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR 1932 ' J. THOMAS HILL. CO., INC. 88 COURT ST., BROOKLYN Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.