Document ayr5bnd59630JjQ5zzZxGpRe

THE GLIDDEN COMPANY ZXEDUUJaBmilUZZlIESSB CLEVELAND, OHIO TO THE SHAREHOLDERS: December 31,1932 On behalf of the Directors, I present herewith the Annual Report of the Company and its subsidiaries as of the dose of business October 31, 1932. Notwithstanding the serious loss in sales volume due to business conditions, the Company has earned a profit, and Earned Surplus shows an increase as compared with the previous year. The continued decline in commodity prices, together with the decline in volume of sales, have accentu ated the problems of operation. Fortunately, our long established budgetary control system has stood the test of the depression and your Officers feel that we can continue to look to the future with confidence. The happenings during the past three years have proven the wisdom of diversifying our products. This diversification has resulted in our earning a profit in each year of the depression. The Company has been successful in increasing the total number of its customers and has added new and important lines of manufacture which, with the return of better conditions, will insure added volume and normal profits. The attention of our Shareholders is directed to the action taken by the Board of Directors in marking down the book value of the Permanent Assets and in the writing off of certain deferred accounts. To take care of these adjustments, the sum of $4,039,878.50 has been charged to Unearned and Capital Surplus, respectively. These adjustments in no wise affect the Earned Surplus of the Company which now stands at $2,920,165.28. Your Directors feel that this adjustment of the Company's assets to meet existing conditions is sound and to the best interests of the stockholders, and is in accord with the consistently conservative policy of the management. ^ The Research and Development Divisions of the Company have been active all through the year and have succeeded in keeping our manufacturing operations fully in step with the march of progress. The work of these Divisions will be continued as in the past. The Officers and Directors desire to take this opportunity to express to the faithful employees of the Company their appreciation of continued loyal, earnest: and efficient work. Yours truly, ADRIAN D. JOYCE, President. GL0002975 AS OF THE CLOSE OF BU Current ASSETS Cash on Hand, on Deposit and in Transit Customers' Notes and Acceptances Receivable Customers' Accounts Receivable $ 223,425.35 3,019,014.05 22,231,553.38 Less: Reserve Miscellaneous Current Accounts and Creditors' Debit Balances Inventories--Raw Material, in Process and Finished Merchandise on Hand and in Transit on basis of lower of cost or market value (Certified by Management) $ 3,242,439.40 155,156.95 3,087,282.45 121,784.65 5,327,763.79 210,768,384.27 Other Assets Cash Surrender Value of Life Insurance Policies Common Stock purchased for resale to Employees--39,266 shares at cost Officers' and Employees' Notes Receivable for Purchase of Common Stock--9,643 shares Miscellaneous Notes, Accounts, Salesmen's Advances, Subsidiary Bonds purchased, Investments, etc. 2 244,631.50 292,511.00 210,012.32 188,317.89 935,472.71 Permanent Land Buildings, Machinery, Equipment, Etc. on basis of cost or Appraisal Value, less special write-down Less: Reserve for Depreciation 21,725,387.06 212,905,988.78 4,005,102.51 8,900,886.27 10,626,273.33 Investment in California Mining Companies Mining Companies--Fully Owned (Not operated during current year): Investment in and Advances to The California Zinc Company and Afterthought Zinc Mining Company 1,010,097.07 Good Will, Patents, Trade Marks, Reorganization Expense, etc. 3,059,062.33 Deferred Inventory of Advertising Stock, Stationery, Factory Supplies, Unexpired Insurance Premiums, Prepaid Taxes, etc. 333,077.06 226,732,366.77 The Glidden Company, Cleveland. Gentlemen:-- December 24,1932. We submit herewith consolidated balance sheet of THE GLIDDEN COMPANY--CLEVELAND, and SUBSIDIARIES, excepting the California mining companies, as of the dose of business October 31, 1932, subject to the followirf comments: Cash funds on deposit as shown by the Company*# records and by reports received from branches and subsidiaries, we e reconciled with amounts confirmed directly to os by the depositary hanks. Notes and ac ceptances receivable at Cleveland and certain of the subsidiaries were iaepcctcd by ns and lists were submitted in substantiation of lilt items at branches and other subsidiaries. Customers' accounts receivable were evi denced by trial baUncus of the individual accounts which were submitted for our examination. At Cleveland and certain subsidiary Companies we also checked the trial balances with the individual ledger accounts. Reserve for doubtful notes, accounts, discounts, etc, in our opinion, it sufficient. Merchandise inventory was based upon physical counts taken and priced uodcr the direction of the management as indicated ky de tailed inventory shseti submitted for our inspection and the entire inventory has been certified to os by s responsible official of the Company as to quantities, salability and a basis of valuation ns representing the lower of cost or nirlu t values at October 31, 1932. The method of pricing and mathematical accuracy of inventory ce rnputatior s were teat checked by us, but we made no verification of quantities. GLD002976 N 2301.01 AT ED BALANCE i/ELANb, a n d s u b s id ia r ie s INESS* OCTOBER 31, 1932 SHEET Current LIABIL Accounts Payable for Purchases, Pay Rolls, etc. Accrued Taxes, Interest, Insurance, Royalties, etc. TIES $ 569,036.00 344,100.18 $ 913,136.18 Funded Debt Five-Year Gold Notes (due June 1, 193 5): Issued Less: Retired First Mortgage 6% Bonds Subsidiary Companies: ($35,000.00 due April 15, 1933) $ 6,000,000.00 1,500,000.00 $ 4,500,000.00 215,000.00 4,715,000.00 Reserves For General Contingencies and Possible Loss on Purchase Commitments 266,607.14 Nominal Capital Stock--Prior Preference 7% Cumulative Authorized--75,000 shares Less: Unissued and Redeemed 10,000 shares Common-Without Par Value Authorized 800,000 shares Outstanding--650,000 shares Stated Capital $5.00 per share $ 7,500,000.00 1,000,000.00 $ 6,500,000.00 3,250,000.00 Surplus Capital Profit and Loss $ 8,167,458.17 2,920,165.28 11,087,623.45 20,837,623.45 $26,732,366.77 (Note A) The outstanding preferred stock of the Metals Refining Company, was called for retirement in October 1932 and funds were deposited with Trustee for the full amount thereof. The stock and funds have been excluded in the preparation of this statement. (Note B) The Companies were reported as having letters of credit outstanding in the amount of $457,644.56 and were contingently liable for foreign drafts discounted amounting to $621.68, at October 31, 1932. (Note C) In the preparation of this balance sheet, net assets located in Canada have been reduced to valuations based upon rate of exchange prevailing at date thereof, with exception of permanent assets which are included at valuation based upon par of exchange. (Note D) This balance sheet is subject to the comments in our "Certificate," included in this report. During the year Undt ore lands, buildings, machinery, equipment, etc., were reduced in the amounts of $1,351,644.60 and $2,326,437.81 by charges to unearned and capital urplus, respectively. The investment in California mining companies was increased during the year in the amount of $20,308.53, representing additional cash advances made by the parent Compary. All ascertained liabilities of the Companies at October 31, 1932 have been provided for in the accompany* inf balance sheet. The Companies' liability for outstanding gold notes and first mortgage bonds payable was confirmed directly to us by the trustees. Mo provision has been made through operations for federal Income taxes as certain charges to capital surplus, etc., are deductible from tamable income. During the year the Company redeemed 4,000 shares of its prior preference stock and also retired 20,557 shares of its common stock. The stated capital was reduced in proporricn to these redemptions and certificate of reduction was received subsequent to October 31, 1932. Subject to the foregoing, WE HEREBY CERTIFY, that in our opinion, based upon the records examined and information obtained by us, the accompanying balance sheet sets forth the financial position of THE GL1D DEM COM PAN Y--Cl.EV ELAN D, and SUBSIDIARIES, excepting tl e California mining companies, as of the close of business October 31, 1932. Very truly yours, Ernst and Ernst, Certified Public Accountants GLD002977 CONDENSED CONSOLIDATED OPERATING STATEMENT THE GLIDDEN COMPANY--CLEVELAND, AND SUBSIDIARIES For the Fiscal Year Ended October 31, 1932 Net Sales (Excluding inter-company and subsidiary sales and transfers) 322,259,952.71 Profit Before Interest, Depreciation and Other Inco me Other Income: Discount on 5%% Gold Notes Purchased and Retired Refund of Excise Tax charged to prior years' Cost of Sales Less: Canadian exchange and additional Personal Property Taxes for prior year 3 225,113.14 41,596.61 3 260,118.04 183,516.53 3 1,044,808.47 443,634.57 Interest on Funded Debt Other Deductions--Net 3 1,488,443.04 3 298,158.73 124,355.10 422,513.83 Profit Before Providing for Depreciation Provision for Depreciation 3 1,065,929.21 534,494.12 Net Profit 3 531,435.09 (Note A) In the preparation of the above statement, net operations of Canadian subsidiary have been adjusted to the basis of exchange rate prevailing at the end of the period. Capital Surplus Balance October 31, 1931 SURPLUS ACCOUNTS Deductions Charges resulting from special write-down of permanent assets and ore lands Note and Bond discount and expense as of November 1, 1931 written off Provision for special reserves Development Accounts written off Less: Net excess of par or declared value over cost of Capital Stock of Parent Company and Subsidiary retired Balance October 31, 1932 Unearned Surplus Balance October 31, 1931 Less: Appreciation of Permanent Assets written off as of November 1, 1931 Balance October 31, 1932 Profit and Loss-Surplus Balance October 31, 1931 Additions Net Profit from Operations for the Fiscal Year ended October 31, 1932 Miscellaneous Credits 531,435.09 6,922.29 3 2,326,437.81 130,052.90 198,491.75 33,251.44 3 2,688,233.90 174,007.10 3 538,357.38 310,681,684.97 2,514,226.80 3 8,167,458.17 3 1,351,644.60 1,351,644.60 30 3 2,873,913.05 Deductions Dividends Paid: The Glidden Company--Prior Preference 7% Subsidiary Company--Preferred Balance October 31,1932 471,086.00 21,019.15 Net Addition 492,105.15 46,252.23 3 2,920,165.28 GLD002978