Document b54L36kaKxRXRjr4DGQ9nLKJ0

474 MOODY'S INDUSTRIAL MANUAL r.crease m ae*"iand for the Tvatenala tney pro To Our Shareholders: C.H. Connolly Vice-Prea ----Corp Comnun. duce would interfere with orderly production In 1984 IC Industries set records for sales, R_A- Wright. Vice-Pres --Human Resources b> th-s segment. pre-tax income income from continuing oper W F Cette, Vice-P-ea___Real Estate No sirgle patent or group of patents is mi- ations, and fully-diluted earnings per common JJL Copper Vice-Prea --Corp P'an. fie DeveL teral to either business group Pneurno has share. In addition n spite of several substan J F. Palmer. Vtee-Pres.--Taxes *, pursued, the policy or seeking patent produc tial acquisitions the company ended the year R.J Swuzer Vice-Prea fit Treas tion for inventions and discoveries relating to m the strongest financial condition in its iisto- ?JvL O'Hara, Vice-Prea--Corp Fin the Aerospace/Industnal Group whicn are in- corporate*! into its products or fail wuhm its field of interest. None of the patents has ever been adjudicated, and there can be no assur vy, with a heaitny balance sheet and extensive lines of credit. For the year, IC Industries* Increased consolidated sales and revenues G A- Lee. V*ce-Pres --Govt. Affairs D.C. Director* Wash. ance regarding the validity oi any patents, to 84 2 billion, 13 percent over 1983 (Showing Age fit Pr*ncpal Corporate^ tinder various research and development con Increased pre-tax income to 8247 8 million. Affih&aoRS) -- tracts. the Government is entitled to a nonex clusive license for governmental purposes to inventions arising under such contracts. Where it is thougnt that business advantages might be gamed patent protection is obtained in xoreign countries as well as in me United States. The Food/Drug Group makes use of a number of trademarks and trade names, 42 percent over 1983 Increased income from continuing opera tions by 38 percent over 1983 8133.3 million. Increased fully-diluted per-share income from continuing operations by 30 percent--to 52.92. and increased primary per-share in come from continuing operations by 27 per cent to 83.17 ended the year with more than 8800 million Archie R. Dykes, (54) Pres, fit Chief Exec. Off- Security Benefit Group. Inc. Chmn fit Chief Exec. Off.. First Pyramid Life Insurance Co of America. Dir Boatmen's First Nation al Bank of Kansas City First National Bank. Topeka. Fleming Companies Inc. Amer-can Council of Life Insurance and Midwest Re search Insutute. largely private label food and health items, in unused committed bank credit tines; Gerald A Fulham, Chiaa Pneurno Corp-. and it operates a franchising program for re tail food stores. Such rights are considered to Lowered debt-to-capitalizanon raao to 45.7 percent. Dir. Aeropca, Inc-, Pneurno Coxp. Woods Hole. Mass.. Oceanographic institution. be of material importance to this business group The company has no reason to believe that it is not fully protected in its use and en joyment of such rights. The Aerospace/Industnal Group partici pates as a suocontractor on many programs with most major U-S manufacturers or mili tary and commercial aircraft. The loss of busi ness on any of several major programs of the Boeing Company, McDonnell Douglas Corpo ration and General Dynamics Corporation would have an adverse effect upon Pncumo'i Aerospace/Industnal Group ' All ot Pneumo's order backlog is m the Aerospace/Industnal Group and includes firm orders as well as options for additional quantities for which the Company expects to receive future orders- At December Jt. 1984. Pneurno'a total backlog was 81.1 Pillion com pared to 8956 million at November JO, 1983 (Pneumo's former year end). Approximately Fully-diluted net income per share for the year was adversely affected by a 810.5 million loss--or 25 cents per fully-diluted share--pri marily as a result of the discontinuance of the Abex Corporation's Stanray railroad parts plant in Hammond, Indiana in the fourth quarter The steps our subsidiary companies have taken to streamline operations, reduce costs, and redeploy assets, position them to register further earnings gains. As an IC Industries company for the full year of 1985. Pneurno Corporation will make a significant contnou- uon to sales and earnings. Today IC Industries is in the strongest fi nancial and strategic position in its history, ready to take the next steps in its long-term strategic program. Our corporate objectives have not changed We wilt continue to divest operations which do not meet our criteria for growth, earmngs. or return on invested capi tal. Member of Board of Governors. Aerospace Industries Assoc.. Trustee oc Regis College. Weston. Maas. John P Gallagher, (68) Senior Lecturer Graduate School of Business Unlve-sicy of Chicago. Dir.. American National Bank fie Trust Co of Chicago Hamischfeger Corp; Amenfin Corp Pet Inc. Stone Container Corp.. and UNR Industries, Inc. Helen Gotland, (58) Pres-. Helen Galland As sociates Dir. Educational Foundation of the Fashion Insutute of Technology; Vice-Pres. fit Dir. City of Hope Hospital and Research Center C. Jackson Grayson. Jr_, (61), Chmn , Ameri can Productivity Center. Inc. Dir- Hams Corp. Lever Brothe-a Overhead Door Corp.. Potlatch Corp . Sun C04 Tyler Corp,, Brownuig-Fems Industries, and Amenway Bank/ Woodway N.A. 8803 million of the December 31, 1984 backlog was firm compared to 8684 million at Novem ber 30 1983 The amount of the backlog at December 31, 1984 estimated for shipment in 1985 was 8454 million with the balance to be shipped in future years. Pneurno s backlog at the end of 1984 was made up of about 70% military and 30% commercial business. Cleveland Pneumatic Company, the largest component of the Aerospace/Industnal Group competes primarily with two other producers in the landing gear industry for ma We will devote a major part of our attention this year to integrating Pneurno into the IC Industries family, and to realizing synergies with Abex. We also anticipate possible acqui sitions for both our Consumer and Commer cial Products groups. We have increased our budget for capital expenditures in 1985 by about 25 percent to 8250 million, with the increased resources to be allocated to our growing aerospace and consumer businesses. ICG capital spending will decline slightly. Robert E Hurrah, (68), Fo-raer Chmn- fit Chief Exec. Off. Stanray Corp Dir Abex Corp.; Hussmann Corp., and Bank of WiUits. > Welter H. Helmerieh. Ill, (61), Pres and Ch*ef Exee. Off.. Helmench fie Payne, Inc. Dir.. Atwood Ocearucs, Inc* Caterpillar Tractor Co.. Combustion Engineering, Inc* First National Bank fit Trust Co. of Tulsa, nrst Tulsa Bancorporation, Inc, and Natural Gas Odonzing. Inc, Trustee. Northwestern Mutual Lu'e In surance Co 3rr fcr * .;Sfc jor commercial and military programs. Al Abex has closed Don-profitable operations WUllam 8. Johnson, (66) Chmn. fit Chief though specific statistics are not available on and introduced products with higher margins. Exec Off, IC Industries, Inc Dir., American the volume of production of landing gear of Pneurno has a backlog of about SI.2 billion, of Productivity Center Continental Illinois these producers. Pneurno believes that Cleve which approximately 8900 million is under Corp., Continental Illinois National Bank fit land Pneumatic is one of the two principal firm contracts. Hussmann has a substantial Trust Co of Chicago; Esmaxk, Inc. Abex producers of such landing gear in the United backlog, and a profitable new European oper Coro Hussmann Corp . Illinois Central Gulf States. Pneurno s National Water Lift Divi ation that provides an additional saxes base of Railroad Co . Midas International Corp., Pep sion, another principal component of the 8100 million. The ICG has reduced its break si-Cola General Bottlers Inc4 Pet Inc, sad Aerospace/Industnal Group experiences even more than 14 percent in the past two Assooauon of American Railroads competiuon in each of its product areas, but Pneurno knows of no other manufacturer which produces the entire range of products manufactured by this division. Claud S. Gor don Company, the smallest component of the Aerospace/Industnal Group, is engaged in a highly competitive business m which there are several producers. PROPERTIES Abex operates 40 plants in the United States 4 in Canada and 12 plants in several other foreign locations. Of such plants. 52 are owried and 4 are leased on a long-term basis. Pet operates 38 owned and 9 leased manu facturing plants located ui the United States and five foreign countries, 22 owned and 7 leased milk and dairy distribution facilities, 5 owned and 2 leased warehouses and 77 owned. SO leased and 10S franchise specialty retail outlets. Hussmann operates 15 owned and 6 leased manufacturing 'acilmfcs in the United States, Mexico and Canada. There are 3 owned and 29 leased branch facilities which sell, install and maintain Hussmann products. Midas operates 3 manufacturing plants In the United States and one manufacturing plant in Canada. Of these plants, one is owned and 3 are leased. In addition. Midas also maintains 18 warehouses of which one is years We recently retained the services of an in vestment banking firm to give us the benefit of its independent judgment on our options for the Illinois Central Gulf Railroad. These op tions include merger with another railroad, sale to a non-railroad investor, spin-off to shareholders, sale to employees, sale of stock to the public, or retaining the ICG in whole or in pan. Midas has acquired 100 percent ownership of all but one of its foreign joint venture oper ations. Pepsi General has three new franchises which add 600,000 people to its service base. The Consumer Products Group, with Pet and Pepsi General's aggressive marketing pro grams, has begun the new year with strong gains over 1984. The economy is strong employment is up. inflation is firmly under control, interest rates have moderated, consumer confidence is high, and both the Congress and the Administration appear committed to controlling the deficit. All our companies should continue to grow in 1985. Early results are quite encouraging. In a strong economic environment, and even con sidering an increase of more than 10 million shares outstanding, we expect our per-share results for the year to exceed the record re sults of 1984. Harold R. Logan. (63) Vice-Chmn.. WJL Grace fit Co- Dir.. Ene-gy Fund, Inc, General Database Technology. Inc. Voyager Petro leums Ltd., Abex Corp., and Illinois Central Gulf Railroad Co Member, President's Asso ciation of the American Management Assoos* non. Independent Petroleum Assooauon * America. Pan American Society* Board ot Governors, University of New Haven. Harry A. Marks (60), Chmn fie Pres^ Lou^J ana-Pacific Corp Dir., American Paper Insa-. tute of Western Forestry Center Louisiana* Pacific Corp., National Forest Products A*" soc; Member, Columbia Pacific Council 01 Boy Scouts of Amer, National Advisory Council of Salvation Army Board of Gover^ nors. Hugh O'Bnan Youth Foundation. Trustee, Oregon Museum of Science fie Industry. Graham X Morgan, (67) Retired Chmru & Chief Exec. Off., United States Gypsum Go-- Dir-, Abex Corp.. American Information' Technologies Corp4 American Hospital Sup^ ply Corp.. Illinois Central Gulf Railroad Gn* and International Harvester Co., Member advisory board. Kemper Insurance. George V Myers, (68), Former Pres-. Stan* dard Oil Co. (Indiana) Dir United Sta*? Gypsum Co- CNA Income Shares, Iflt. American Petroleum Institute; Trustee, Ru*^g owned and 17 are leased. At Dec. 31 19&J, Mi das leased and operated 46 Midas Muffler Shops ui the U.S 29 Midas Muffler Shops m Canada and 79 Midas Muffler Shops m 9 for eign countries. Pepsi General's facilities include 8 bottling plants. 2 combination bottling/canning plants and one canning plant. In addition, Pepsi Gen eral has 29 distribution warehouses and 4 stor age warehouses In addition Industries engages m a wide va riety bf industrial, commercial and residential real estate development activities in the Unit ed States. LETTER TO STOCKHOLDERS William B Johnson Chairman and Chief Executive Officer March 6, 1985 MANAGEMENT Officers W B Johnson. Chinn, fie Chief Exec. Off. B F Schenk, Pres, fie Chief Oper Off. R.F Stewart Senior Exec. Vice-Pres. kP Fagan, Exec. Vice-Prea.--Finance S. Kirby. Exec. Vice-Prea.. Gen. Counsel, fie Sec. CX. Pecehemno Exec. Vlce-Prea. B.S. Chelberg. Senior Vice-Pres.--Consurn. Serv Presbyterian-St. Luke's Medical Center. __ C.L Pecehemno (37). Exec. Vice-Preau. Ljr.. Industries. lac.. Pres* fit Chief Exec. Of%j Pneurno Corp. Geo. T, Sctiarffenberger, (65). Chmn. fit Q*j* Exec. Off- City Investing Co,, Dir Northf^ Corpj Earle M Jorgenson Co., ICidde. 1 Rockefeller Center Inc^ Georgetown Urn' sity* and Home Group Ino, Trustee, uw sity of Southern California. Boyd F Schenk, (62). Pres, fit Chief Off-. IC Industries. Inc-, Dir*. Pet Inc.: terre Bank; Laclede Gas Co; Illinois * Co AX Staley Manufacturing Co-andShippam, Ltd., Trustee, William Under*f The following Is the letter to stockholder* of William 8. Johnson, Chairman and CMf Exacv hve Officer of 1C Industries. Inc. ae h appeared in the Company's 1984 Annual Report. W W Larsen. Senior Vlce-Prea Corp. Af Xfairs F Westover Senior Vlce-Prea fie Contr. AJL Lehmann, Vice-Pres.--Investor ReL Co -1 Robert P. Stewart. (57), Senior Exec. Prrs IC Industries, Inc.; Trustee., Wo: Polytechnic Insutute.