Document VKbgKMELwzZD5rLrvQxejwXD4

% The '^Eagle* TO Ol.'R SHAREHOLDERS: Sales of The Eagle-Picher Company for 1951 established a new high, and net income was sub stantially larger than in 1950, despite a material increase in taxes. At the end of the fiscal year, working capital and net worth were at new peaks. Net sales for the fiscal year ended November 30, 1951 amounted to $82,086,318 compared with $69,123,903 for the preceding year, an increase of 18.7%. Net profit after taxes for the 1951 fiscal year was ,$3,703,807 compared .with $2,929,296 for, 1950. As at November 30, 1951 and November 30, 1950, net working capital was $18,625,755 and $15,486,220, respectively; and net worth was $26,398,195 and $24,441,894, respectively. Sales Net sales of $82,086,318 for the fiscal year ended November 30, 1951were the largest in the Com pany's history. Moreover, sales in the second half of the year undoubtedly would have been higher except for the short supply of lead. Throughout this six months period foreign prices were above domestic ceiling prices and during the fourth quarter domestic lead was under Government allocation. As a result, our lead intake in the second half not only fell far short of meeting the requirements of our manufacturing divisions but also was considerably less than our intake for the same period of 1950. Prices of lead (New York) and zinc (East St. Louis), the Company's two principal com modities, remained at 17c and 17 J % per pound, respectively, from the beginning of the fiscal year until October 2, 1951. From October 2 to the present time these prices have lx*en 19r and 191 ,r, respectively. The new prices thus affected sales only in the last two months of the fiscal year. Earnings Net profit after taxes for the fiscal year ended November 30, 1951 was $3,703,807, equivalent to $4.11 per share on the 900,000 shares outstanding at the year end and to $3.74 per share on the 989,177 shares now outstanding. This.compared with net profit of $2,929,296, equal to $3.25 per share reported for the previous year and to $2.96 per share based on the present capitalization. Gross operating profit before depletion and depreciation in 1951 was $17,020,420 compared to $13,557,652 in 1950, an increase of $3,462,768, and net profit before taxes for these two years was $9,503,807 and $6,399,296, respectively, an in crease of $3,104,511. It is significant that most of the increase in gross profit was carried through to net profit before taxes. Provision for Federal and State taxes on income last year was $5,800,000, of which $900,000 was for excess profits tax. This was an increase of $2,330,000 over the 1950 tax provision. On ap proximately $3,000,000 of 1951 taxable earnings. Federal taxes on income amounted to 82.3%. It is extremely difficult for an organization to keep driving for additional sales, increased pro duction, lower costs and greater efficiency, when its members realize that less than 18% of the results of their combined efforts may be translated into net profit after taxes. We believe the Eagle- Picher organization de.-orves mdit for the job it did in these respects during the past year. iinlnnee Sheet Current assets at Xovemher 80, I951 amount ed to $24,328,172, including $9,178,684 of eash ami governments, and current liabilities were $0,702,417, a ratio of 4.26 to 1. Working capital of $18,02.7,7do "'as the largest in (lie (Company's history and represented an increase of $3,139,535over that of a year ago. Total inventories at November 30. 1951 were $7,729,498 compared with $6,889,014 a year earlier, an increase of $840,454. The metal content of inventories at November 80, 1951 was slightly lower than at. November 30. 1950. Investments in and advances to foreign sub sidiaries Were reduced by $1,057,718 during the year. This was due largely to the repayment of advances by the Mexican subsidiaries. The Mexi can investment at the year end stood at $1,598,776 or about 1.5 times the payment made in 1951. The present prospect indicates a further sizable reduc tion of the advances in 1952. Net fixed assets at November 30, 1951 totaled $11,102,406 compared with $11,325,613 at Novem ber 30, 1950, a decrease of $223,207. A charge (if $1,786,818 to earned surplus elimi nated from the balance sheet $1,409,833 cost of stocks of consolidated subsidiaries in excess of their book values at time of acquisition; the balance of $376,985 was a similar item representing tile final settlement oi a contingent liability, deter mined by an earnings formula, arising from the purchase of The Orange Screen Company in 1946. . Intangible assets are now carried at $1 although the above mentioned write-offs represented actual cash expenditures. i\et Worth The net worth of your Company at November 30, 1951 was at an all-time high of $26,398,195, equivalent to $29.33 per share on the year end rajdtaiiza!km; aw! to $26,68 'j j w t sh&aariev .-<m ' Sift*. stiarn-s outstanding. Net worth at Novem ber 30, 1950 was $24,441,894, after dt-iioetitsa of intangible assies of $1,4**9,833, J^iritlenfis The n*gular quarterly dividend of 30 cents per share was maintained during 1951 and an extra of 30 cents was {aid in December, making total cash disbursements of $1.50 for the 1951 calendar year. The same amount was paid in 1950. In addition, a 10' ,' stock dividend was declared in November and paid in 1 Vccm!>er, after the end of the fiscal year. A total of S9.177 shares was issued and fractions aggregating 823 shares were paid in cash. For each dividend share a total of $18 was transferred from earned surplus, of which $10'was credited to capital slock and $8 to capital surplus.. Earned surplus was also decreased by the cash payments made in lieu of Fractional shares. The total charge to surplus-aggregated $1,625,8-13; the cash payment amounting to $20,657 was included in dividends payable on the year-end balance sheet and the remainder of $1,605,186 will be reflected in subsequent balance sheets. Earnings of the .Company for..the1951 fiscal year were in excess of the above charges aswell as all cashdividendsdeclared during the year. The Board of Directors remains of the opinion that the best interests of shareholders are served by adhering to a conservative regular dividend rate which can be supplemented .by payment of extra dividends, in cash or stock, when consistent with earnings and the financial position of the Company. Sh arch alders At November 14, 1951, there were 6,242 share holders of record owning the 900.000 shares of common stock then outstanding. In comparison, the Company has approximately 5,400 employees. Inasmuch as stock held in a broker's or nominee's name may represent the holdings of many in- dividual shareholders, the number of owners greatly exceeds the number of employees. Shareholders of the Company reside in every state of the Union and in several foreign countries. Over 62 per cent 01 them own less than 100 shares of stock and the average holding is about 1-15 shares. They.are to be found in every walk of life and fall in the following general cl assifications: Mon Women Joint Tenants Bickers & Nominees .' Ddudaries, Institutions, etc. No. of Holder.s1 11,804 2 ,:!(>2 (512 197 207 , (5,242 . No. of Shares o 5.7,940 2:5(5,188 .5:5,(544 201,821 72,407 900,000 Directors find Officers . It is with deep.regret that we report tin* death on March 21, 1951 of Mr. Robert E. Mullane who had served as a director of The Eagle-Picher Company since 1932. His sound business judg ment contributed much to the Company's welfare. We were saddened by the passing on November 15, 1951 of Mr. Vincent II. Beckman who had ; been a member of the Board of Directors since 1929. He rendered'loyal and constructive'Service to the Company and his loss is deeply felt. It is with sincere sorrow that we report the death of Mr. Arthur E. Bendelari on February 10, 1952. An eminent mining engineer, Mr. Bendelari joined our Company in 1915 as General Manager of the Mining Division. He Was President of the Company from .1927 to .1937 and continued as a director until his retirement in March, 1951. He was greatly beloved by all members of our organi sation."'- On November 23, 1951, Mr. Elmer Isern and Mr. Miles M. Zoller were elected Vice Presidents of the Company and Mr. K. E. Kimmel was elected Assistant Secretary. Mr. Isern is Manager of the Mining & Smelting Division and has been a director of the Company since 1946. Mr. Zoller is Manager of 7he Pigment Division and wa> elected a director in 1943. OutltMfk It is always difficult to. foresee .what may happen in any year, anti 1952 certainly is no exception. Business activity in general should lx* maintained on a high level (luring the present year as a result of full employment and high individual incomes, increased expenditures by the Government for nationaldefense, and large capital expenditures by corporations. The business pattern will not be uniform, however, and dislocations will continue to occur in some industries because of Government restrictions, allocation of scarce materials, and possibly labor surpluses or shortages; Many of the industries we serve should fare well but others may curtail operations. We believe that earnings of your Company for the 1952 fiscal year will be satisfactory. The diversity of the Company's products and their uses should sustain physical volumes in a period of high over-all activity. The recent decline in foreign lead and zinc prices was anticipated and has merely reduced their premiums over domestic prices. ' The Company has a relatively favorable tax base and its excess profits tax credit for 1952 is estimated at about $6,500,000. The financial position is strong and will serve not only as a buttress against possible recessionary tendencies but also will permit expansion of our business as favorable opportunities arise. The Eagle-Picher Company continues to enjoy good management-employee relations and we shall strive to maintain this relationship in the future. By order of the Board of Directors. Jo e l M. Bo w l b y Chairman Cin c in n a t i, Oh io Fe b r u a r y 15, 1952 T. Sp e n c e r Sh o r e President  (UVsiHJIlATEU' B i; s|||;n ASSETS CURRENT ASSETS: 1951 ('ash ............................................................................................. I . S. (iovornmeni obligations ;il cost (market value * I,*248,*288 al November 80. l!!7! t ............ Accounts and notes receivable................................................. A 7,7(W,!HS: Ix k s : Allowance fur doubtful receivables . .... . . .......... 840.SI77 * 7 .`>01.07*2 I .-2 1*2.002 7.4*24.0`0 Inventories of raw materials, work in process, finished products and supplies: Ores, metals and metal bearing products - Note 1 Ollier products, niereha.nili.se For resale, and manu facturing ma leriuls and supplies at cost ...... To t a l Oi:nni;\r As s ic t k . .................. 8.!)8f),008 8.780,807 _7.7*2!).4$)8 24,0*28,17*2 OTHER ASSETS: Repair parts and maintenance supplies .... ................ Investment in and advances to associated company and sundry securities ^il.or belowcost...................... .. . . .. Miscellaneous 'accounts and advances. ................... : 1.171,47$) 807.404 008.0*28 1 ,870,7S)G INVESTMENT IN AND ADVANCES TO FOREIGN SUB SIDIARIES NOT CONSOLIDATED Note 2: Mexican subsidiaries. ... .............. ......................................... Canadian subsidiaries....... .1......... ................ 1 ,7!)8,77G 008,000 *2,200,770 PROPERTY, PLANT AND EQUIPMENT: Mining lands and leases; mills, smellers and fabricating ])lanls;and railroad and miscellaneous'properties. . . .-. Lc n h : Allowance for depletion, depreciation, etc................. 4*2,*207,80*2 81.!G*2.07G INIftKUIDLC HOJl Ij . Cost, of stocks of consolidated subsidiaries in-excess of . 'book value, al.dales of acquisition, of net assets acquired......................................................................................... Patents, goodwill, etc.. . . . . ; ............................ .. . 1 11.10*2.400 PREPAID AND DEFERRED CHARGES: Prepaid freight, insurance, etc.................................................. Miscellaneous deferred charges................................................ 1G5,7$)8 780,080 007.078 $40,*2!)8,024 ; isso-v s 7.010.20 * S.7S0.2SG 007 .sot 020.000 s,21.7.002 ;!,.i fH o.807,4!>8 o.sso.044 *2 S `JoS. 807,704 *280.21*2 1,041,781 *2,0 11,0*2!) 74*2.807 0.874,4<>4 4*2.148.004 00.S22.4S1 11,8*27.018 t .400.888 1 1.400.884 1 <>2,700 780,778 ____ 728,*278 !?4().()85).7()0 The accompanying notes arc an THE EAGLE-PICHER GO II PA IT I t'OXSOIJIMTKII' i. sliKCTS i ASSETS CURRENT ASSETS: 1951 ( "itsll ............................................................ ; t\ S, (invernment obligations. at cost (market value I.CJ;it Xovcmber 30, 19.71)................................... Accounts ami notes receivable....... .. . ... . ... . ... ... . . $ 7,70.7,94.7 Ij Ch x : Allowance fordoubtful receivables. ............ 340.!). >5 $ 7.931.0.72 1.242,032 7,424.990 Inventories nf raw materials, work in process, finished products ;mil supplies: Ores, metals and metal bearing products Note 1 Other prod ticks, mcrclmndi.se for resale, and manu facturing mnlcrialsnnd supplies at cost.. ...... To t a l Oiu iu io n t As k k t s . ......... ............. 3.939.003 3,789,89.7 7,729.498 24,328.172 OTHER ASSETS: Itepair parts and maintenance supplies............. Investment in and advances In associated company and sundry securities at or below cost.. ......................... Miscellaneous accounts and advances........... ................ 1,171,IT!) 33,7,494 303,023 1,870,590 INVESTMENT IN AND ADVANCES TO FOREIGN SUB SIDIARIES NOT. CONSOLIDATED Note 2: Mexican subsidiaries. . .....................:................................. ('anadian subsidiaries............... ................. 1 ,.`508,770 098.000 2,200,770 PROPERTY, PLANT AND EQUIPMENT: Mining lands and leases: mills, smelters and I'abrieating plants:and railroad and miscellaneous properties. .... ' 42,20.7,802 Lrxi<: Allowance for depletion, depreciation, etc....... . XI. 102.050 11.102.400 INTANGIBLE ASSETS: Cost of stocks of consolidated subsidiaries ill excess of book value, at dates of acquisition, of net assets :: acquired.................................................................................... Patents, goodwill, etc,;. ............................................................ 1> 1 PREPAID AND DEFERRED CHARGES: Prepaid freight, insurance, etc................................................ Miscellaneous deferred charges.............................................. 105.593 5X0,080 09,7.073 $40.293,024 1950 ? .7.910.209 8 8..7S3.2S0 307.894 020.000 8,21.7.392 3.553.540 3,33.7.498 0.889.044' 21.034.70.7 90.7, 97.7 395,594 280.313 1,041,781 2,011,02!) 742.80.7 3.354.494 42,148,091 30,822.481 11.32.7,013 1,409,833 1 1,409,834 192,700 .730..77X 723,273 $40,0S9,?00 The accompanying notes are an i.-il IY A NO 0 0 ME ST IG SUB SID IA RIE S V:'-: ' y . '3-'-V'I r.\: V. KTS \K AT NOVKMI5KK .`SO. l!)5i AND 1950 V ... . . .. :: .... . . ..-yv-A:- y;-W> . VT >. y V v'y-V , LI A BILITIES CURRENT LIABILITIES: '.yvv V- -yvyw TV;v TVyyyV ;i -- .. 1951 :vv :;vy;v-y'Vvcvv 1950 VVVv -V.V - Accounts i);i,v;ihlc. . : ................................................................ $ ",!) I (),(>()() S .5,810.06 l Dividends payable..................................................................... 1'nrehnse money obligation...................... ' .V Accrued lialiililii's: Wages anil salari<'s. . . . v.\ . . . . . . V. ... ... *.. . $ 574,640 5(50 (557 408.000 vvvcyyvsv/y-'vvv.; 530 710 . - V: ;10.3 ,34' 0'/I;.v;V:y . $ 151,50.3 vcHTvv-v Taxes --(illicr [.him law's on income,. V.V, . . .;. . .. .. Ollier.......... . .....v.V. ..;,;V......................... 101,578 702,072 ' 1,558,200 15)2,004 465,1554; : 1,108.731 Provision for Federal and Slate taxes oil income...... .. Ltvn:S. (lovernmenl/ohlif'ations. . . ......... .. 7,252,2290 0(5,0,59).033,.,3590 2/58,870 4,111,508 3,525,000 586,508 To t a i. Cu u u k n t IOa iu i.it ik s ; V............ .... 5,70.2,417 > 6,148,485 i( : . PURCHASE MONEY OBLIGATION: *.'V;vvV:. ';V Payable serially to March IV',15)52, less payment due within o ik ' year. . ...;V. .................................................. LONG-TERM DEBT: '.l1 Notes, payable serially September 1. 11)515 to September 1, 1907.. . . . . ...... . . ......... ...... V /V - .Vyy 7,500,000 Vyv S' ''V. . 81.015 7,500,000 RESERVES FOR SELF-INSURANCE: Workmen's compensation ... ........ Fire and tornado. ... . . . ... . ......... .... . . 551,055 141,057 (55)0,012 422.017 130,450 558,470 STOCKHOLDERS' EQUITY--.Votes 3 and 4: ('apilal slock -- par value $10 per share: Authorized................................. 1,000,000 shares Issued and outstanding. . . . . 000,000 shares Surplus: Capital surplus....................... ........................................... Earned surplus................................................................... 0,000,000 2,050,232 15,:547,0:5 26,308,105 $40,203,624 an integral part, of this balance-sheet. 0,000,000 2,050,00(5 14,801,631 25.851,727 $40,080,700 7 THE EAGLE-PiCHER COMPANY AND DOMESTIC SUBSIDIARIES STATKMKNTS OK ('< )\.H<)MD.VTKI) PROFIT' A VI) FOSS AX!) !:a u .\i-:i) st HPi.r.'FOR THK VKARS KNOW) Xt)V FM ISFR 30. l!)f)1 a XI) 10.70 1951 NET SALES..................................................................... $82,08(5,318 PRODUCTION AND MANUFACTURING COSTS GROSS OPERATING PROFIT tion, and depreciation........... .. before deple ............. EXPENSES: Selling. .:.............. . .. ..... . . ....... .. . .. . . . . . . . . Trallic. warehousing and .shipping. .................... . (ieneral and administrative............ .. . , . ..... $ 2,252,154 782,144 2,(517,051 NET OPERATING INCOME before depletion and depreeinlioii........... .............................................. OTHER INCOME............................................................... INTEREST EXPENSE: Long-term debt....... ............ ................................... Ollier................... ............................ .............................. `Fin.000 5,20 1 DEPLETION, DEPRECIATION, Kle.: Provision for depletion and depreciation....... Kxploralion^and prospecting expenses and loss or gain on disposit ion of capital assels|. ..... . NET PROFIT -.. iu'foiv ami Slate luxes on income........................................................ ............. FEDERAL AND STATE TAXES ON INCOME: Federal normal tax and surtax............... Federal excess profits lax....... ........... Stale income lax.................. ....... .............. NET PROFIT FOR YEAR.................................. EARNED SURPLUS --BEGINNING OF YEAR.. 1.407,202 385.(500 4,810,000 OOO.OOO 00.000 CHARGES TO EARNED SURPLUS: Dividends paid and accrued................................... Charge arising from wriUsoH' of cost of stocks of consolidated subsidiaries in excess of book value, al dates of acquisition, of net assets acquired, including $.`57(1,!)8o accrued Novem ber .`50, 1051 under terms of purchase agree ment ........................................................................... EARNED SURPLUS --END OF YEAR Notes 3 and 4................... ........ ,... 1,370,057 i ,78(5,818 (55,0(55.808 17.020,420 . 5,05)2.24!) 11,3(18,171 `248.7)20 11,010,000 230,201 11,380,0!)!) 1,88`2,8!)`2 !).5 0.`5,807. 5,800,000 3,703,807 14,801,(531 18,505,438 3,157.475 $15,347,008 1950 $(50,123,003 55,5(5(5.251 13,557.052 $ .`>,`2)28.305 700,80)2 `2,380,050 `2`25,000 (5,0(58 1,003,040 33.073 5,378,883 8,178,7(50 1(58,208 8,34(5,077 231.0(53 8.115.014 1,71(5.(518 (5,800,20(5 3,175,300 215,000 70.700. 1,330,017 3,470.000 2,020,200 13,212,252 1(5,141,548 1,330,017 $14,801,031 The accompanying nol.es are an integral purl of this statement. THE EAGLE-RICHER COMPANY nfiMn rmi DOMESTIC SUBSIDIARIES .VOTES TO FINANCIAL STATK.MKXTS NOVK.M UKK .`50. 1 J).T> Xiii'ii 1 -t'lider tine base-stock method of 'inventory valuation, adopted at November ISO, I!)!!), basic quantities of l;>,000 Ions of load and 10,000 Ions of zinc arc valued a (fixed prices based on (!.;> eenls per pound for lead (New York) and 3 eenls per pound for zinc (Kasl Si. bonis): (lie remainder of I lie inventory metal content is priced at 11u* lower of average cost or market. Inventories of inelal eonlenl. of lead al November .`>0, 1031 (which are priced on the base-stock method of inventory valuation as in the previous year) are below established base quantities. ..Provision' of $423,000 has been made in the accounts to cover the excess of the cost, of replacing the liquidated quantities at. the November tit), I Dal market..prices over the fixed prices adopted, for base-slock'invontory valua tion. - No rn 2The equity of The Kagle-I'ioher ('onipany and Domestic Subsidiaries in foreign subsidiaries, not consolidated has increased $1,007,031 since dales of acquisition, as a result of profits, losses and dividend distributions. Of this increase $007,0 17 accrued during the year ended November .`50, 1 Dal. Xo t k 3-..On October 20, 1031 a dividend was declared payable December 10. I Dal in capital slock of I tie con jpanv at the rate of o ik 1 share for eaeli 10 shares held. Such div idend was paid by fix1 issuance of 80,177 shares and I he payment, of $20,(la7 as a cash dividend.in lieu of the issuance of fractional shares totaling 823 shares. On December It), 10a! a charge of $1,003,180 was made against, earned surplus representing $18 per share for the 8!),177 shares so issued. Common stock was credited at. the .par value of $10 per-share, or $801,770, and the balance of $713,410 was credited to 'capital surplus. No t h .4 The .8% notes contain a covenant, which so long as any of the notes remain outstanding, restricts the amount which may be declared as dividends (other than .those payable in slock of the Company} or'applied in the purchase.- redemption or retirement of the Company's capital stock. AL November 30, ID,'ll the amount not so restricted was $0,431,087. No t h 3-- A portion of the Company's sales for the year ended November 30, 1031 is subject to renegotiation under the Renegotiation Act of 1931. No provision has been made for possible refunds, since it appears that renegotiation will have im material effect on the financial statements as of November 30, 1931. OPERATIONS for (he Years Ended November 30 1951 1950 Net Sales................................................. .$82,086,318 $69,123,903 Net Profit before Income Taxes........... 9,503.807 6,399,296 Federal and State Taxes on Income ....... .. . . 5,800,000 3,470,000 Net Profit for Year . .... . ;. ..... ........... Per Share*....... ......... ............... . . .............. 3,703.807 4.11 2,929,296 3.25 Dividends Paid and Accrued.......... .......... Per Share............................................. 1,370,657 1.50 1,339,917 1.50 Retained in the Business..... ................ 2,333,150 1,589,379 FINANCIAL POSITION as at November 30 1951 1950 Current Assets ........................... $24,328,172 $21,634,705 Current Liabilities.......................................................5,702,417 6,148,485 Working Capital. . ......... .... ......................... 18,625,755 15,486,220 Fixed Assets, Net............ ............. .11,102,406 11,325,613 Investments in and Advances to Foreign Subsidiaries . ................... ..., ...... 2,296,776 3,354,494 Long Term Debt........................... 7,500,000 7,500,000 Net Worth............................................................ 26,398,195 24,441,894t Per Share* .................................................... 29.33 27.15 *Hnxed on 000,000 shares of common stock outstanding. On December 10, 1951 a 10% stock dividend was paid. There arc presently 989,177 shares outstanding tAfter deduction of 81,109,838 of intangible assets.