Document VKavXyv1yLya2e337re5bnOvK
Annual Report
1948
Th e Sh e r w in -Wil l ia ms Co .
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N15358
S-W 000229
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EXECUTIVE DEPARTMENT
101 PROSPECT AVE. N. W.
CLEVELAND
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S-M. 000230
Th e Sh e r w in -Wil l ia ms Co .
' A. W. STEUDEL
PRESIDENT
To the Stockholders-.
Herewith are .presented the Consolidated Balance Sheet and Consolidated Income and Surplus accounts of The Sherwin-Williams Company for the fiscal year ended August ol> 1948.
The earnings before Federal Taxes and Special Reserves were $20,583,797.22.
The amount set aside for Federal Taxes was $7,500,000.00.
A provision of $3,000,000.00 was made for the Employees' Pension Plan and $1,000,000.00 was set up out of profits as a reserve against the Company's foreign investments.
The final consolidated net earnings after these deductions are $9,283,797.22.
These net earnings, after allowing for Preferred Dividends, are equivalent to $7.00 per share on the present outstanding 1,277,854 shares of Common Stock.
Referring to the $1,000,000.00 above mentioned as set aside as a reserve against the Company's foreign investments, this was considered advisable on account of the exchange restrictions that have developed during the past year in Argentina, Brazil, and Mexico. The operations themselves of these foreign subsidiaries showed good profits in the respective currencies of these countries.
The sales volume was the largest in the Company's history, exceeding that of the preceding year by 4.5%. This volume is due to the sustained denumd for the Company's paint products.
A better supply of raw materials has made it possible to satisfy more fully this demand than has been the case for quite a number of recent years.
Kem-Tone, one of the Company's outstanding products, con tinues as the largest selling wall finish on the market.
Another product that has obtained wide use in the agricultural market is known as Agricultural Weed-No-More. This is a 2-4-D compound which has been sprayed for weed control over millions of acres of com, wheat and other small grains, and pasture land.
During prior years the Company made provisions for possible inventory shrinkage by establishing reserves for this purpose. As a result of studies of a plan which would be equivalent to a last-in, first-out basis with respect to certain raw materials, the reserve has been adjusted in 1948 to reflect a 1945 price basis. The raw materials for which the reserve has been established are primarily oils and pigments used in the paint business. Since 1945 oils have advanced about 68% and pigments 40%.
About $4,400,000.00 was spent on plant, adding new equipment and expanding production and warehousing facilities at the Com pany's various properties.
The management takes this opportunity to convey its thanks and appreciation to all in the service of the Company for their loyalty and efficient efforts that have produced the results reported in this Annual Statement.
President
CONSOLIDATED PROFIT AND LOSS AND SURPLUS
THE SHERWIN-WILLIAMS COMPANY AND CONSOLIDATED SUBSIDIARIES
Year called August 31, 1943
PROFIT AND LOSS
Profit from operations for the year ended August 31, 1948, before other income, provision for depreciation and other deductions, and federal taxes on income.
Reduction of inventory reserve..___ ..... ....___ Other income..__ ...!______________________
$22,403,546.47 500,000.00
___ 234,983.12
Deductions:
Provision for pensions$3,000,000.00
Provision for depreciation 1,451,746.84
Provision of reserve against investments in foreign subsidiaries___________________________________
Provision for foreign taxes, foreign exchange adjust ments, and miscellaneous items
Interest expense_________________________________
Net charge arising from sale or abandonment of de preciable assets________________________________
Federal taxes on income--estimated: Provision for the year___ ________ $7,300,000.00
Adjustments for prior yean....__ NET PROFIT.................................
197,179.55
1,000,000.00 581,838.23 249,342.32 74,625.38
7,497.179.55 13,854,732.37 .. $ 9.283,797.22
EARNED SURPLUS
Balance at September 1,1947____ ........ .................. ..
$27,339,945.59
Add net profit for the year.....-_______________ ... Deduct:
9,283,797.22 $36,623,742.81
Cash dividends declared and paid or provided for during the year: Preferred $4.00 per share...... $,344,798.00
Common--$3.00 per share...... 3^833^564^0^ $4,178,362.00
Premium on preferred stock called for redemption. BALANCE AT AUGUST 31,1948.....................
24,750.00 4,203,112.00 -- $52,420,630.81
Note A--Other income includes the amountof $139,666.38 for dividends on capital stock of the unconsolidated Canadian subsidiary. Final statement as to operating
results of that subsidiary for the year ended August 31, 1948, was not available at date of issuance of this report. The Company's share of net loss (due mainly to tax
adjustments) of the other unconsolidated subsidiary, not taken up, amounted to approximately $26,000.00.
Note B-yProfit and loss accounts of foreign subsidiaries were translated into U. S.,
dollars mainly on tha basis of the average rata of
in offset during the year.
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AUDITORS' CERTIFICATE
Board of Directors, The Sherwin-Williams Company, Cleveland, Ohio.
We have examined the consolidated balance sheet of The SherwinWilliams- Company and its consolidated subsidiaries as of August 31,1948, and the consolidated statements of profit and loss and surplus for the year then ended, have reviewed the system of in ternal control and the accounting procedures of the companies and, without making a detailed audit of the transactions, have examined or tested accounting records of the companies and other supporting evidence, by methods and to the extent we deemed appropriate. Our examination was made in accordance with gener ally accepted auditing standards applicable in the circumstances and included all procedures which we considered necessary.
In our opinion, the accompanying balance sheet and related summaries of profit and loss and surplus present fairly the con solidated position of The Sherwin-Williams Company and its con solidated subsidiaries at August 31, 1948, and the consolidated results of their operations for the year, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.
Cleveland, Ohio October 18, 1948
ERNST & ERNST
Certified Public Accountants
S-W 000235
Th e Sh e r w in -Wil l ia ms Co .
101 Prospect Ave., N. W. Founded in 1366
Cleveland, Ohio
Manufacturers of
Paints, Varnishes, Colors, Stains, Enamels, Lacquers, Lead Products, Dyes, Chemicals, Lithopone, Litharge, Linseed Oil, Dry Colors,
Insecticides, Herbicides* Waxes, Cleaners, Polishes.
Main Plants
Cleveland - Chicago - Dayton - Detroit - Newark - Pittsburgh Oakland, Cal. Bound Brook, N. f. - Gibbsboro, N. I. Dallas - Los Angeles - Coffeyville, Kan.
A. D. BALDWIN C. S. EATON M. J. FORTIER GEORGE GUND
Directors
CP. JARDEN D. A. KOHR C. M. LEMPERLY G. H. ROBERTSON L. H. SCHROEDER
A. W. STEUDEL H. D. WHITLESEY THOS. E. WILSON L. W. WOLCOTT
Officers
A. W. STEUDEL, Paaidant M. J. FORTIER. Via Patidani S. B. COOLIDGE, Via Pratidant C;M. LEMPERLY. Via Paaidanl L. H. SCHROEDER, Via Pniidant and Toaaurar N. E. VAN STONE. Via Pnaidani H. D. WHITTLESEY, Via Pruidani
F. J. SQUIRES, Sacatauy
Transfer Agents
CLEVELAND TRUST COMPANY' Cbniaai OUt
BANKERS TRUST COMPANY N*wYork,N. Y.
Registrars
CENTRAL NATIONAL BANK ClmUti Ohio
GUARANTY TRUST COMPANY Nw York* N. Y.
S-W 000237