Document VJeV9wERpr8rYYrxd2Xn7O0EN

FILE NAME: Keene (KNE) DATE: 1964 DOC#: KNE015 DOCUMENT DESCRIPTION: Excerpt from Annual Report -1964 Review of Operations revie v; ir-* 711031 r v Operation' ior 1964 showed a 67^ increase in sales over 196?. Sales amounted to 522,031.321 in 1964 compared to 513.207.9S3 in 1963. Despite this record growth of sales, a disappointing loss resulted, amounting to S9S1.54S compared to net income of 5217.916 for 1963. This loss can he attributed to three significant events which occurred during the year. ]n February 1964 the Compam acquired the insulation contract division of Mundet Cork Corporation. The op erations of this division accounted for most of the Cornpan-,'s increased activity. However, the acquisition in volved start-up ana other related nonrecurring expenses i cn contributed material!; to the loss for the tear. These , j.jnses are now behind us and management looks for ward to significant progress b> this division in 1965 and future years. In our annual report for 1963 we outlined the arrange ments made with MacAndrews L Forbes Compare o: Camden. New Jersey for the manufacture and finishing of mineral board and tile acoustical products. Unfortuxately these arrangements proved to be completely un satisfactory and were terminated (for the reasons outlined in the notes to financial statements!. The Company is present!} seeking to recover the losses sustained b} it b\ arbitration under the rules of the American Arbitration Association. The joint venture which the Compan} entered into with the Pall Corporation in 1962 to make fiber glasi pipe covering was assigned to the Certain-teed Fiber Glass Corporation in Jul\ 1964. The original experimental ma chinery was abandoned. The investment in this equipment and other related costs resulted in extraordinary expenses t 1 of 5629.326 Th. development of improved machinen proceeded under the joint venture agreement at & cost of 5333.000. On February 30. 1965. after the new equipment was completed, it was mutual!} agreed to terminate tlu joint venture. The machines are being installed at our Trenton plant, and fiber glass pipe covering will be pro duced at that location. We have ever} expectation that the operation of this equipment will contribute favorabh to future profits. . During the year the International Division concluded li censing agreements with Swedish and Japanese firms. This Division continued to give technical a'sistance to our various foreign licensees. On October I. 1964. Mr. Harold L. Humes assumed the responsibil:tie> of Technical Di rector of this Division. On October 1. 1964. Mr. William H Hii! announced his retirement. Mr. Hi!! founded Buidwin-H.T. Compan} in January !9?5 and was it? Presiden; un:" Augur: 1959 At that time he became Chairman ol the Board of Baldwin-Ehret-Hi!!. Inc. He served in that capeen;, until August 1960 and as Chairman of the Executive Commit tee until April 1963. when he resigned to devote his time to the international operations. In Jui; 196- Mr. Anthor.} J. Diler.no joined the Compan; a' Director of Finance and was elected a Vice President in March 1965. The losses incurred during 1964 are not of a continuing nature. The Compan; is in a sound financia! condition and earnings are anticipated in 1965. Our employees have been most cooperative during thn year of readjustment. We are grateful for their lo}al sup port. With them we look forward with confidence to the challenge of the coining year. Od^ Ml jfn Alvin M. Ehret. Jr. Chairman of the Board Edward R Stevens President