Document X7bZJ2LEo57DLd2brwe6wpK7K

RS-0010M 1/17/02 NUECE8 OFFICERS and DIRECTORS DIRECTORS Fred H. Daniels Honorary Chairman Loots E. Griffith Chairman Robert K. Griffith Chapin Riley Robert S. Bowditch Philip R. Mather Richard J. Rutherford Bruce G. Daniels Ellis T. Knobloch OFFICERS Loots E. Griffith Chairman and Vice President Robert K. Griffith President, General Manager and Treasurer Henry H. Michelsen Vice President--Sales Henry H. Hemenway Vice President -- Engineering Ellis T. Knobloch Vice President Alexander L. Mitchell Vice President--Chicago Office Kathleen M. Crooks Secretary High pressure steam produced by large, high capacity boilers is used to spin the turbine gen erators of the electric utility industry. These are important Riley products and have been pur chased by over 42% of the investor owned electric ut///ty companies in the U.S.A. Some typical in stallations are shown on this page and on our cover. FINANCIAL HIGHLIGHTS Sales (Billings) Net Earnings before Federal Taxes Net Earnings after Federal Taxes Net Earnings Per Share before Federal Taxes Net Earnings Per Share after Federal Taxes Cash Dividends Per Share Net Worth Net Worth Per Share Shares Outstanding Expenditures for Plant and Equipment Working Capital 1966 $59,348,600 2,537,714 1,670,398 6.49 4.27 .80 18,379,394 47.00 391,014 797,225 14,291,998 1965 $47,645,518 (615,037) (631,128) (1-57) (1.61) 1.60 17,019,655 43.53 391,014 722,306 12,766,460 1964 $42,164,562 1,712,134 783,153 4.38 2.00 1.60 18,263,530 46.71 391,014 858,973 13,542,067 1963 $33,838,166 1,881,017 1,071,412 4.81 2.74 1.60 18,089,690 46.26 391,014 876,050 13,461,610 1962 $37,183,878 682,873 469,633 1.75 1.20 1.60 17,638,393 45.11 391,014 443,660 13,920,809 RS-001098 1/17/02 NUECES Page two TO OUR SHAREHOLDERS The comparative figures resulting from consolidated operations for the years 1966, 1965, 1964, 1963 and 1962, as shown on page 2 of this report, re flect the degree of improvement accomplished in our operations during 1966. All divisions operated on a profitable basis in 1966 and the results from our continuing cost reduction efforts and improved production methods have been consequential. A shortage of skilled labor in our field construction operations and de layed deliveries by suppliers did, however, adversely affect year end results. Expenditures during 1966 for additions and improvements to wholly owned property and facilities totalled $797,225. as compared with $722,306. in_1965 and the estimated cost of completing authorized additions and im provements at year end was $1,350,000. Financial figures given in this report do not reflect the effect of substan tial Engineering Fees not yet received from our Licensees. Such fees arc based on contracts actually sold by our Licensees and the Engineering Fees in volved will be paid to us in the same ratio as our Licensees receive contract payment from customers. The consolidated backlog of unfilled orders on December 31, 1966 was approximately $68,530,000. and on February 27, 1967 was approximately $77,900,000. With increased emphasis on our research and product improvement pro grams and the acceptance of our products by the electric generating and many other industries, we look forward to future years with confidence and en thusiasm. To our customers, shareholders, loyal employees and suppliers we express our sincere appreciation and thanks for their cooperation and support. By Order of The Board of Directors L. E. Griffith, Chairman February 27, 1967 R. K. Griffith, President Page three RS-001099 1/17/02 NUECE8 CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS Sales ................................................................... Cost of Sales..................................................... Gross Income................................................... Selling and Administrative Expenses Selling.......................................... ................. Administrative ............................................ Total ................................................. Income (Loss) From Operations.................. Other Income................................................... Other Deductions............................................ Income (Loss) Before Federal Income Tax Provision for Federal Income Tax............... Net Income (Loss) for Year (Per Share: 1966-$4.27; 1965--($1.61) ) Year Ended December 31 1966 $59,348,600 $53,248,268 $ 6,100,332 1965 $47,645,518 $44,264,742 $ 3,380,776 $ 2,223,191 2,258,179 $ 4,481,370 $ 1,618,962 1,318,051 $ 2,937,013 399,299 $ 2,537,714 867,316 $ 1,670,398 $ 2,076,370 2,542,218 $ 4,618,588 ($ 1,237,812) 870,014 ($ 367,798) 247,239 ($ 615,037) 16,091 ($ 631,128) Retained Earnings at Beginning of Year.............................................. Add: Prior Years' Federal Tax and Other Adjustments................ Deduct: Dividends Paid (Per Share: 1966--$.80; 1965--$1.60) ......................................... Retained Earnings at End of Year......................................................... 14,202,116 2,152 $15,874,666 312,811 $15,561,855 Provisions for Depreciation deducted above amounted to $708,329 in 1966 and $648,470 in 1965. 15,445,992 12,874 $14,827,738 625,622 $14,202,116 R8-001100 1/17/02 NUECeS Page four CONSOLIDATED ASSETS Current Assets Cash ......................................................................................... Marketable Securities At Cost (Market Value 1966--$4,710,104; 1965--$5,234,284) . . Notes and Accounts Receivable--Trade, Less Allowances of $37,647 for Doubtful Accounts............. Other Receivables.................................................................. Inventoriesmf Materials and Supplies (At Lower of Cost or Market) ........................................ Costs of Incompleted Contracts, Less Related Billings of $13,490,158 ($11,261,983-in 1965) ........... Engineering in Process.......................................................... Prepaid Expenses .................................................................. Total Current Assets............................................ Other Assets Stock of Other Corporations--At Cost............................... Notes Receivable--Trade, maturing after 1967 ............... Total Other Assets................................................. Property, Plant and Equipment Land ........................................................................................ Buildings................................................................................. Machinery and Equipment................................................. Less: Accumulated Depreciation........................................ Net Property, Plant and Equipment...................... Patents--At Cost Less Amortization............................... December 31 1966 1965 $ 759,198 5,565,764 13,614,814 647,620 7,787,894 97,261 574,688 286,491 $29,333,730 $ 600,021 5,565,764 13,308,744 1,143,130 6,533,218 1,667,808 570,360 286,129 $29,675,174 $ 13,943 312,972 $ 326,915 $ 13,943 326,579 $ 340,522 $ 404,754 5,457,209 8,002,643 $13,864,606 8,722,720 $ 5,141,886 $1 $34,802,532 $ 404,754 5,404,677 7,426,846 $13,236,277 8,140,020 $ 5,096,257 1 $35,111,954 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1966 Note A; Contingencies--The Company is a defendant in a suit relating to damages arising from an explosion. A claim on another expiosion has been made against the Company. The Company denies liability on the foregoing and believes the final outcome of these matters will not materially adversely affect the financial statements of the Company. Note B: Basis of Consolidation---The consolidated financial statements include the accounts of the Company and all subsidiaries (each of which is wholly owned), intercompany items and transactions have been eliminated in the consolidated figures. Note C: Depreciation---For financial reporting purposes and for Federal Income Tax purposes, depreciation is provided tor by the straight line method and by the declining balance method, based upon esti* mated useful lives of the assets. Page five . \ Bsaoiioi inrea. BALANCE SHEETS Current Liabilities Notes Payable to Banks......................... Accounts Payable.................................. Customers' Advances ........................... Accrued Liabilities ............................... Federal Income Tax............................. Total Current Liabilities . . . LIABILITIES December 31 1966 1965 $ 4,990,000 4,688,363 3,342,764 1,525,413 495,192 $15,041,732 $ 6,600,000 3,326,492 4,962,731 2,019,491 $16,908,714 Reserves Building Fund.............. Contingencies ............. Expenses ...................... Total Reserves $ 200,000 150,000 1,231,406 $ 1,581,406 $ 200,000 150,000 1,033,585 $ 1,383,585 Stockholders' Equity Capital Stock--Common, Par Value $3.00 Per Share Authorized--1,050,000 Shares Issued and Outstanding--391,014 Shares............. Other Capital................................................................ Retained Earnings......................................................... Total Stockholders' Equity........................ $ 1,173,042 1,444,497 15,561,855 $18,179,394 $34,802,532 $ 1,173,042 1,444,497 14,202,116 $16,819,655 $35,111,954 Note D; Bonus Profit Sharing Plans--The Company has bonus profit sharing plans under which distribution is made in the following year to a selected list of employees of the Corporations as approved by the Board of Directors. The total payment is computed by a formula on the basis of the year's income. The total accrual charged to 1966 operations is $59,070. payable to participants of a subsidiary. Note E: Retirement Plans---The Company and its subsidiaries have various pension plans covering substan tially all of their employees. All plans are separately funded and actuarial reports of these funds at December 31, 1966 indicate that past service requirements are more than provided for. RS-001102 1/17/02 NUECES Page six CONSOLIDATED STATEMENT OF SOURCE AND APPLICATION OF FUNDS Source of Funds Operations Net Income (Or Loss) ................................. Charges Requiring No Current Cash OutlayDepreciation ................................................ Increase in Reserves................................... Other ........................................................... Total From Operations........................ Proceeds from Sale of Assets............................. Decrease in Long-Term Notes Receivable . . . Adjustment of Prior Yean' Federal Taxes . . . Application of Funds Dividends Paid ................................. Additions to Plants and Equipment Increase (Decrease) in Working Capital Year Ended December 31 1966 1965 SI,670,398 707,947 197,821 18,930 $2,595,096 24,720 13,606 2,152 $2,635,574 (5 631,12S) 648,470 137,045 ( 7,757) $ 146,630 10,455 404,844 10,392 $ 572,321 $ 312,811 797,225 $1,110,036 $1,525,538 $ 625,622 722,306 $1,347,928 ($ 775,607) To The Board of Directors Riley Stoker Corporation 9 Neponset Street Worcester, Massachusetts Gentlemen: We have examined the consolidated balance sheet of Riley Stoker Corporation and subsidiary companies as of December 31, 1966 and the related consolidated statement of income and retained earnings for the year then ended. Our examination was made in accordance 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 consolidated balance sheet and the related consolidated statement of income and retained earnings present fairly the financial position of Riley Stoker Corporation and subsidiary companies at December 31, 1966 and the 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. Worcester. Massachusetts March 3, 1967 George A. Smith and Company Certified Public Accountants Page seven R8-001103 i/ir/02 NUECES PROGRESS IN 1966 New Products The acceptance of our supercritical design by the utility industry is evi denced by the purchase in 1966 of the first unit by South Carolina Electric and Gas Company. This steam gener ating unit, with a capacity of 2,846,000 pounds of steam per hour, will operate at 3735 psig with superheat at 1000F and reheat at 1000F, when fired by three (3) Riley Ball Tube Mills. The introduction in 1966 of the OD-2 design boiler for medium capacities was featured by the purchase of a 220,000 pound per hour unit by Philadelphia Electric Company for its Schuykill Sta tion. This proprietary design incorpo rates the advantages of both package type boilers and shop assembled com ponents which substantially reduce the cost of field erection in the higher capa- Designing boilers with special firing equipment for unusual fuels other than coal, oil and natural gas is a Riley specialty. This boiler at an electric utility power station in Belgium is one of the world's largest designed to burn blast furnace gas. It was manufactured and constructed by Riley's manufacturing associate Chaudronneries Pierre Srouhon 8elgium. A duplicate has been ordered. R84011M 1/17/02 NUECES Page eight cities that are not available in package type boilers. Sales Current inquiries indicate that the volume of new business available to our industry will be substantial in 1967. Manufacturing The total capital investment in 1966 included expenditures for new equip ment at the Detroit plant, the A. W. Cash Company, Badenhausen Corpora tion, and Union Iron Works Plants. Operation of the two additional elec tric melting furnaces, authorized in 1965, and installed in 1966 has substan tially improved the efficiency of the foundry operations at the Detroit Plant. The addition of 9200 sq. ft. to the panel assembly'area and the introduc tion of new machine tools have im proved the operations of Badenhausen Corporation. The installation of additional modem machine tools and improved production methods are resulting in continued cost reduction at all facilities. The new Riley 00 Boiler is e medium sized industrial type boiler that is completely engineered by electronic data processing from custom design specifications and was developed to compete in price with standard design boiler$ of our competitors. This unit, tucked in the corner of the gener ating plant of The Fitchburg Gas & E/ectric Light Company, is producing steam for 22,704 kilowatts. Page nine t R8-001106 1/17/02 NUECES RIUeY BOILER CUSTOMERS (Partial List) ELECTRIC UTILITIES Arizona Public Service Co. Caroline Power 4 Light Co.* Central Power & Light Co. Kansas Gas 4 Electric Co.* Holyoke Water Power Co.* Minnesota Power 4 Light Co.* Eastern Iowa Light 4 Power Co. Philadelphia Electric Co.* Louisiana Power 4 Light Co.* Texas Electric Service Co.* Public Service Company of Indiana, Inc.* Arkansas Power 4 Light Co. Utah Power 4 Light Co.* Columbus 4 Southern Ohio Electric Co.* Central Illinois Light Co.* Houston Lighting 4 Power Co.* South Carolina Electric 4 Gas Co.* Union Electric Co. of Missouri* Nevada Power Co. Commonwealth Edison Co.* Florida Power Corporation* Dallas Power 4 Light Co.* Monongahela Power Co. The Potomac Edison Co.* ~ Delmarva Power 4 Light Co. Massachusetts Electric Co. Southwestern Gas 4 Electric Co. Northern States Power Co.* Central Louisiana Electric Co.* Gulf Power Co.* Sierra Pacific Power Co.* Pennsylvania Electric Co- Iowa Electric Light 4 Power Co.* Montana-Dakota Utilities Co.* Mississippi Power Co.* Ohio Edison Co.* Iowa Public Service Co.* Interstate Power Co.* Pacific Gas 4 Electric Co.* Southern Indiana Gas 4 Electric Co.* Upper Peninsula Power Co. New Orleans Public Service Inc.* Northern Virginia Power Co. lowa-lllinois Gas 4 Electric Co.* West Penn Power Co. Upper Michigan Power 4 Light Co.* Superior Water, Light 4 Power Co. The Cliffs Power 4 Light Co. Otter Tail Power Co.* North Dakota Power 4 Light Co. The Hartford Electric Light Co. Taiwan Power Co.* Community Public Service Co. Wisconsin Electric Power Co.* West Texas Utilities Co.* Fitchburg Gas 4 Electric Light Co. The Detroit Edison Co. Manila Electric Co.* Tampa Electric Co.* San Diego Gas 4 Electric Co. Southwestern Power Co. Salt River Power District* Boston Edison Co. Louisville Gas 4 Electric Co. Georgia Power Co. Alabama Power Co. INDUSTRIALS General Motors Corp.* Ford Motor Co.* Celanese Corporation* Great Atlantic 4 Pacific Tea Co.* Boise Cascade Corp.* The Dow Chemical Co.* Deere 4 Company Esso Standard Oil Co.* Standard Oil of Calif.* Bethlehem Steel Corp. U. S. Steel Corp.* Republic Steel Corp.* Marathon Southern Corp. The Texas Co. Shell Oil Co.* Phillips Petroleum Company The Champion Paper 4 Fibre Co.* W. Va. Pulp 4 Paper Co.' Gaylord Container Corp.* Olin Kraft, Inc.* B. F. Goodrich Company* Union Carbide Chemical Co.* Continental Can Co.* Kennecott Copper Corp.* Hooker Chemical Corp.* Swift 4 Co.* Western Electric Co.* E. I. duf'ont de Nemours 4 Co.* U. S. Rubber Co.* A. E. Staley Mfg. Co.* Crocker Burbank 4 Co., Ass'cn. St. Regis Paper Co.* Masonite Corp.* Humble Oil and Refining Co.* American Enka Carp.* Commercial Solvents Corp. American Viscose Corp.* Monsanto Chemical Co.* Rayonier, Inc.* Westinghouse Electric Co.* General Electric Co.* Northern Ohio Sugar Co. Crucible Steel Corp. of America Gulf States Paper Co. Campbell Soup Co. Pennsylvania Railroad* St. Croix Paper Co.* Glidden Co.* International Harvester Co.* Allis Chalmers Mfg. Co.* Norton Co.* Pratt 4 Whitney Div. of United Aircraft* Publicker Industries, Inc.' McDonnell Aircraft Corp.* Mead Corporation* Great Lakes Steel Corp.* General Foods Corp.* American Brass Co.* American Smelting 4 Refining Corp.* Freeport Sulphur Co. Kaiser Aluminum 4 Chemical Corp.* Celotex Corp. The Charmin Paper Products Co.* Bryant Sugar House* Alton Box Board Co.* Marathon Oil Co. Shell Chemical Co.* Oiamond National Corp.* Emery Industries, Inc. Strathmore Paper Co. Koppers Co., Inc.* Upjohn Company* C. H. Dexter 4 Sons, Inc. American Oil Co. Barber Colman Co. Standard Brands, Inc. P. H. Glatfelter Co. Horoel 4 Co. Weyerhaeuser Corp. Remington Rand Co.* Archer-Daniels-MIdland Co.* Penn Station Housing Project Copperweld Steel Co. Libby, McNeil 4 Libby* Naugatuck Chemical Co. Morgan Packing Co. Toledo Edison Co. Holy Cross College* Suntlde Refining Co. Tobin Packing Co. R. J. Reynolds Tobacco Co.* Carnation Company* Chrysler Corporation* Firestone Tire 4 Rubber Co.* Chevrolet Motor Oivision* American Chemical Co.* Wyckoff Steel Co.* Atlantic Refining Co. H. J. Heintz Co. Anheuser-Busch, Inc. The Hilton-Davls Chemical Co. The American Tobacco Co. Coming Glass Co. U. S. Plywood Corporation Shell Oil Co.* General Electric Co.* United Rubber 4 Chemical Co. Utah-ldaho Sugar Co. Indiana State College Knox College Southampton Penitentiary Farms Norwich University Rikers Island Penitentiary Miles Chemical Co. National Bureau of Standards Pond Lily Co. Nicholson File Co. Great Lakes Steel Div. National Steel Corp. Hercules Incorporated* Buckeye Sugars, Inc. Hudson Pulp 4 Paper Co. Antilles Chemical Co.* Rochdale Village, Inc. Bucyrus-Erle Co. Johns-Manville Products Co.* Reynolds Metals Co. Torrington Company* The Budd Company Ingersoll Rand Co. Thomas 1. Lipton Co., Inc. Holly Sugar Co.* American Smelting 4 Refining Co.* Swift 4 Co.* Mohawk Paper Mill, Inc. Container Corporation of America* Florida Sugar Corp.* Kohler Company General Aniline 4 Film Corp. Princeton University Sugar Cane Growers Coop* Goodyear Tire 4 Rubber Co.* Geigy Chemical Co. Hunt Foods and Industries Georgia Pacific Corp. Cooper Tire and Rubber Co. Chemstrand Co. Eastman Kodak Co. National Steel Corp. Great Western Sugar Co. Brown 4 Williamson Tobacco Co. Gulf Oil Corp.* Borden Chemical Co. The Boeing Co.* Continental Oil Co. Spreckles Sugar Co. Ervtng Paper Mills U.S. Gypsum Llnkbelt Co. 'Repeat Orders The MH Package Boiler manufactured by our Union Iron Works subsidi ary has been selling exceptionally well- The complete unit on a de pressed flat car is one of ten 125,000 Ibs/hr MH Boilers purchased in recent months by The Boeing Company. R8-001106 1/17/02 NUECES OPERATIONS DIRECTORY GENERAL OFFICES Worcester, Massachusetts Administration, Sales, Engineering, Construction, Service. RILEY STOKER CORPORATION Detroit, Michigan Fuel Burning Equipment 8A0ENHAUSEN CORPORATION Cornwells Heights, Pennsylvania Large Utility and Industrial Steam Generating Equipment UNION IRON WORKS Erie, Pennsylvania Held Assembled and Package Boilers, Process Heating Equipment A. W. CASH COMPANY Decatur, Illinois Control and Pressure RegulaUng Valves Detroit Plant Union Iron Works A. W. Cash Co. SALES OFFICES--Albuquerque, Atlanta, Baton Rouge, Boston, Charlotte, Chicago, Cincinnati, Cleveland, Detroit, Denver, Honolulu, Houston, Jacksonville, Kansas City, Los Angeles, New York, Philadelphia. Pittsburgh, Portland, Salt Lake City, San Francisco, Seattle, St. Louis, St. Paul, Syracuse. Licensed Manufacturing Associates JOHN BROWN LAND BOILERS, LTD. Steam Generating and Fuel Burning Equipment The United Kingdom and Eire Steam Generating Equipment Europe (Except Belgium. Luxembourg. France. Spain. Portugal and their possessions) FOSTER WHEELER LIMITED Steam Generating and Fuel Burning Equipment Canada DISTRAL S-A. Republic of Colombia, Venezuela, Ecuador and Peru RILEY DODDS AUSTRALIA, LIMITED Steam Generating and Fuel Burning Equipment Australia, New Zealand and the Republic of South Africa FAMA Stokers -- Europe, Cambodia, Turkey and Viet Nam CHAUDRONNERIES PIERRE BROUHON Steam Generating Equipment Belgium, Congo and Grand Duchy of Luxembourg SOCIETE O'EXPLOITATION PUSINES METALLURGIES Steam Generating Equipment and Gas. Oil, Coat Burners France, Spain, Portugal and their possessions Overseas Agents INDIA Shanta Brothers Private Limited VIET NAM AND CAMBODIA Brownell, Lane Inti. Ltd. PAKISTAN (nterhom Ltd. KOREA Joongwon & Company, Ltd. KINGDOM OF DENMARK Thomas Schmidt TAIWAN The Suiki Enterprise Co., Ltd. PHILIPPINES Atlantic Gulf & Pacific Co. of Manila, Inc. ARGENTINA Sociedad Argentina Tecnica Industrial y Comercial, S. A. PUERTO RICO AND DOMINICAN REPUBLIC Abarca Warehouses Corp. ISLAND OF MAURITIUS Rey & Lenfema, Ltd. CHILE Racontec Ltda. TURKEY Sinai Tatbikat T.A.S. R8-001107 1/17/02 NUECES