Document bay5aR8v1bow8RB97n2MR7JQk

MEETING OF STOCKHOLDERS OF THE SHERVrDi-VfILLIAMS COMPANY. The Sixtieth Annual Meeting of the Stockholders of The SherwinfliHiams Company was held at the office of the Company, #101 Prospect Avenue, N. W, Cleveland, Ohio, at 11:00 A. U., Tuesday, December 14, 1943. The meeting was called to order by the Chairman, Ur. Geo. A. Martin, hc presided over the meeting. Sr. T. G. Murphey, Secretary of the Company, acted as Secretary of the meeting. The Secretary reported - "There are represented at this meeting of stockholders .. of The Sherwin-Williams Company, either in person or by proxy, the holders of 420,08? shares of the Common Capital Stock of tlhe Company, out of a total outstand ing of 638,927 shares. This, being a majority, con stitutes a quorum." The Chairman appointed Messrs. L. Reese and F. A. Stanton, Inspectors and Tellers, to verify the number of shares represented. On motion by Ur. H. J. Main, seconded by Ur. D. A. Kohr, the minutes of the last annual meeting of December 8, 1942, were approved as read. It was moved by Ur. L. H. Schroeder, seconded by Mr. J. A. Sanford, and approved, that, the reading of the Annual Report, as shown in the printed report to stockholders, be dispensed with. A copy of the report, marked Exhibit "A", is attached. The Chairman reported that while industry is to convert to a pre war basis, our own industry is in good condition and we have very little to do with reconversion; that further developments are being planned, but will be held in abeyance until the war is ended. The institution as a whole is in good health. We recently lost two very able executives of the Acme White Lead & Color Works--Ur. C. A. Campbell, Vice President and General Manager, who passed away very suddenly on December 4, 1943, and Ur. R. H. Stephens, Treasurer, who had been with us more than thirty years and was more than a credit man, on October 20, 1943. We also lost a very wonderful man in Lowe Brothers, on.November 18, 1943,--Ur. D. P. Haber, who had been with us a great many years. A younger man, well qualified and capable, has been moved into the position. He stated that in his opinion we were never better manned than vre are at present. Ur. F. A. Stanton made the report for the Inspectors and Tellers, as follows: MEETING OF STOCKHOLDERS OF THE SHBRYTEN-raLlAMS COMPACT. -2- . December 14, 1943, *i a : :-m b u "The Inspectors and Tellers report that at this meeting of Stockholders of The She rwin-Williams Company, held this 14th day of December, 1943, there are present in person or by proxy, and entitled to vote, the holders of 420,087 shares of the Common Capital Stock of said Company, out of a total outstanding of 638,927 shares." Mr. F. E. Davis nominated the following as directors for the coming year and until their successors are elected: A* D. Baldwin C. S. Eaton George Gund H, J. Hain C. P. Jarden D. A. Kohr Geo. A. Martin 2. E. Martin L. H. Schroeder A. W. Steudel H. D. Whittlesey Thos. E. Wilson L. W. Wolcott, and moved their election. The motion was seconded by fir. Rollin H. White, and carried. The Chairman thereupon declared the said persons duly elected as directors. On motion by Mr. D. A. Kohr, seconded by Mr. Rollin H. White, and carried, the meeting adjourned. AA^-Jt ^A ^ Secretary, RECORD BOOK PAGE_______ ATTEST SECRETARY 0007-SWP-000005276 MEETING OF SHAREHOLDERS OF THE SHERV/IN-WILLIAMS COMPANY. December 14, 1943 ilATS J-itt 1S34 RECORD BOOK PAGE_______ ATTEST SECRETARY 0007-SWP-000005277 fetsbJtd- CXj* Annual Report 1943 Th e Sh e r w in -Wil l ia ms Co . 0007-SWP-000005278 N14272.01 Th e Sh e r w in -Wil l ia ms Co . GEORGE A. MARTIN CHAIRMAN ON THE ROARO To the Stockholders: We submit herewith the Annual Report of The Shenvin-Williams Company for the fiscal year ended August 31st, 1943. The earnings for the year after allowing for all charges including depreciation, but before providing for Federal Income and Excess Profits Taxes and Special Reserves were $9,603,843.52. The reserve for Federal Income and Excess Profits Taxes amounted to $4,957,915.82 and Special Reserves $850,000. The final Consolidated Net Profit available for dividends was $3,795,927,70. After deducting Preferred Dividends, the earnings are equivalent to $5.07 per share on the Common Stock. The Company's inventories are in excellent condition and consist of clean, salable merchandise. In view, however, of the prevailing . high prices of certain materials, it was considered advisable to provide a reserve of $500,000 for possible inventory shrinkage. In accordance with established accounting practice, the post-war refund of excess profits tax is shown under "Other Assets" in the amount of $327,202.68. To provide for post-war adjustments and contingencies a reserve of $350,000 has been set up. Profits include those from transactions subject to renegotiation under the provisions of the War Profits Control Act. Renegotiation proceedings have been commenced but the effect of such renegoti ation, if any, has not yet been determined. The Company's sales showed an increase of 11.6% over the previ ous year. However, due to higher raw material prices and operating costs on the one hand and established price ceilings on the other, our gross profit was below last year. War business came first in all our operations and our products have given a good account of themselves on all fronts. Our paints and other protective coatings are widely used on airplanes, ships, tanks, trucks, shells and other war equipment as well as for camou- flage purposes. Our regular Trade Sales paint lines for civilian purposes were curtailed and streamlined to meet the needs of essential property protection. Many colors and sizes and some products were dis continued. Since April 1, 1943 we have operated on a Linseed Oil Quota of 50% of the previous base period on house paints, enamels, varnishes. 0007-SWP-000005279 etc. Other civilian restrictions have been rigidly followed. We were able, however, to minimize our sales losses m these lines, first, through the streamlining above referred to. Then, too, our KemTone resin emulsion finish required a minimum of critical materials. Finally, the research work in our laboratories enabled us to reformu late many products and at the same time maintain high qualify standards so that in many cases our products are even superior to any previous formulation. The demand for our products continues far in excess of our ability or capacity to meet it, with a large backlog of orders particu larly from our established dealer trade. Our package and container problem has been greatly relieved by. our own fibre package which nas proven vety satisfactory. We are in full production at Chicago, averaging more than 750,000 per week. This development has been achieved by our own people and has been an indispensable factor in maintaining our sales. In the chemical division of our business, we produce most of the acetanilid used in this country which is the base for sulfa drugs. The acetanilid is sold to drug manufacturers but the Company also makes sulfanilimid intermediates. The Company continues to operate for the War Department of the Government a large ordnance piant located at Carbondale, Illinois. Our plants and properties are working at full capacity and over time and have been kept at the highest possible efficiency under existing conditions. We wish to express our appreciation to all our staff for their loyal and tireless work in laboratories, factories, warehouses, stores, offices and in the field. Our institution is proud indeed of its 1,700 men and women in the Armed Forces, who are making such great sacrifices for our country. Our Post-War plans await only the time when we can put them into effect, when this old world will be thirsty for a new coat of paint for beauty as well as for protection. za Chairman of the Board President 0007-SWP-000005280 CONSOLIDATED PROFIT AND LOSS AND SURPLUS THE SHERWIN-WILLIAMS COMPANY AND SUBSIDIARIES Year ended August 31, 1943 PROFIT AND LOSS Profit from operations for the Tearended August 31,1943, before other income, provision for depreciation, other de ductions, and federal taxes on income Other income..________ __...._______ $12,034,840.37 221,264.62 Deductions: $12,256,104.99 Provision for depreciation...______ $1,426,108.49 Loss on disposal of fixed assets and expenses applicable to nonoperating . properties..._....___.......___ 695,813.80 Provision for possible inventory shrinkage ____........____ 500.000.00 Provision for postwar adjustments and contingencies ....._....... 550.000.00 Interest expense.____......____... 68,339.87 Provision for doubtful accounts, pen sion payments, and miscellaneous items____....._____i 461.999.31 Provision for federal taxes on income --estimated: Normal income and declared value excess profits taxes... $2,602,000.00 Excess profits taxes (less postwar refund of $309,800.00)................. 2,788,200.00 $5,390,200.00 Less adjustments of prior years' provisions..........________ 452,284.18 4,957,915.82 8.460.177.29 NET PROFIT..-........................... $ 5.795.927.70 EARNED SURPLUS ` Balance at September 1, 1942... Add net profit for the year____________ $29,645,765.64 5.793.927.70 Deduct: $33,439,691.34 Cash dividends declared and paid or provided for during the year: Preferred--$5.00 per snare $ 555,757.50 Common--$3.00 per share______ 1,916,781.00 S2.472.53S.50 Premium on preferred stock called for redemption___ .......... 24.750.00 2,497.288.50 BALANCE AT AUGUST 51. 1943 $50.942.402.84 (Note A)--Other income includes the amount of $55,416.71 for dividends re ceived from the unconsolidated Canadian subsidiary. Final statement as t6 operating results of that subsidiary for the year ended August 51, 1945, was not available at date of issuance of this report.The Company's proportionate share of net profits of the other unconsolidated subsidiary, oot taken up, amounted to approximately $64,190.00 (Note B)--Profits of the companies include those from transactions subject to the provisions of the War Profits Control Act providing for recapture of any profits found as a result of renegotiation to be excessive. Renegotiation proceedings have been commenced but have not progressed to a point where determination can be made as to the effect, if any, that such renegotiation may have upon the financial statements of the companies. Any refund of profits that might result, would be after credit of the amount of applicable income and excess profits taxes paid thereupon. 0007-SWP-000005281 CONSOLIDATED .THE SHERWIN-WILLIAMS C August Ajseir CURRENT ASSETS Cash ___ ......................... U. S- Government securities--at cost and accrued interest (quoted market $351,101.56)........................................ Trade notes and accounts receivable, less reserve (includes accounts ag gregating $27,882.20 receivable from subsidiaries not consolidated)_ Inventories--raw materials and sup plies, in process and finished mer chandise stated on basis of lower of cost or market (estimated inter-plant and inter-company profits have been eliminated), less reserve of $500,000.00 for possible inventory shrinkage___ $15,231,038.42 350,814.06 9,863,272.55 23,389,544.05 TOTAL CURRENT ASSETS............. $48,834,669.08 INVESTMENTS AND OTHER ASSETS Securities of subsidiaries not consolidat ed (Note A)$ 3,705,825.00 Other securities--at or below cost_____ 18,775.51 Postwar refund of excess profits tax (including refundable amount from Dominion of Canada)--estimated.. 327,202.68 Insurance deposits, miscellaneous notes and accounts receivable, claims and advances, less reserves 294,517.59 4,346,120.78 PROPERTY, PLANT, AND EQUIPMENT Land, buildings, machinery and eguip-..... ment--at cost to consolidated com panies, less reserves for depreciation. 18,275,853.26 PATENTS AND TRADE-MARKS Nominal amount ... ______________ 1.00 DEFERRED CHARGES Advertising stock, stationery, etc.$ Prepaid insurance, deferred taxes, etc. 489,098.95 313,434.94 802,533.89 $72,259,178.01 (Note A)--Investments in securities of subsicharies not consolidated include-- (1) investment of $3,695,825.00 in Canadian subsidiary, stated at cost which was less than the proportionate share of the book value (including intangibles) of the net assets of such affiliate as reported to the Company; net increase in equity in this sub sidiary since date of acquisition, not taken up by the parent Company, amounted to % approximately $314,000.00 as of August 31, 1942, (final statement as to operating results for the year ended August 31, 1943, _was not available at date of issuance of this report);--(2) investment in another subsidiary amounting to $10,000.00 stated at cost; the Company's proportionate share of net profits of such subsidiary not taken up, amounted to approximately $97,100.00. } <| '- 0007-SWP-000005282 ALANCE SHEET PANY AND SUBSIDIARIES , 1943 Liabilities, Capital Sleek, and Surplus CURRENT LIABILITIES Trade accounts payable^ pay rolls, drum deposits and miscellaneous items (includes accounts payable to subsidiary not consolidated in the amount of $5,126.22) $ 8,378,393.41 Preferred dividend payable September 1, 1943................................................. 134.298.75 Deposits--employees, employees' benefit association ana officers 830.076.75 Accrued taxes (other than federal in come taxes) and miscellaneous items. 447,801.38 Federal taxes on income---estimated $ 6,373,685.86 Less United States Treasury Notes-- Tax Series (purchased ana held for tax payments).........__ ....... Notes payable to bank (in connection with advances to and loans by foreign subsidiary) 5.557,920.00 3,015,765.86 629,465.24 TOTAL CURRENT LIABILITIES.. $13,435,801.42 RESERVES Forpostwar adjustments, contingencies, maintenance of plants, employers' liability insurance, etc-------------------- 1,163,898.75 CAPITAL STOCK AND SURPLUS Capital stock: Preferred-authorized 395,500 shares (par value $100.00 each--redeem able at $105.00 per share): Outstanding-r-Series "AAA" 5% cumulative preferred-- 107,439 shares........................ $10,743,900.00 Common--authorized 800,000 shares (par value $25.00 each): Outstanding--638,927 shares... 15,973,175.00 $26,717,075.00 Earned surplus..................................... 30,942,402.84 57,659,477.84 $72,259,178.01 (Note B)--Net current ssets (not significant) of consolidated foreign subsidiaries have been translated into U. S. dollars at the applicable exchange rates in effect at August 31,1943. Such subsidiaries are located in Argentina, Canada, Cuba, and Mexico. (Note C)--The Company was contisgentlyliable at August 31,1943, as surety on a performance bond reiative to performance by The Sherwin-Williams Defense Corpora tion (subsidiary not consolidated) as a party to a construction and operation contract with The United States of America. (Note D)--Reference is made to Note B to the summaries of profit and lossand surplus relative to profits of the companies subject to the provisions of the War Profits Control Act. 0007-SWP-000005283 1I <s AUDITOR'S CERTIFICATE Board of Directors, The Sherwin-Williams Company, Cleveland, Ohio. We have examined the consolidated balance sheet of TheShenvinWilliams Company and its consolidated subsidiaries as of August 31, 1943, 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 generally accepted auditing standards applicable in the circumstances and included all procedures which we considered necessary, including tests of trade receivables by communication with debtors and observation of procedures followed in ascertaining inventory quantities at the principal locations. In our opinion, the accompanying balance sheet and related summaries of profit and loss and surplus present fairly the consoli dated position of The Sherwin-Williams Company and its consoli dated subsidiaries at August 31, 1943, and the consolidated results of their operations for the year, in conformity with generally ac cepted accounting principles applied on a basis consistent with that of the preceding year. Cleveland, Ohio November 1, 1943. ERNST & ERNST Certified Public Accountants 0007-SWP-000005284 Th e Sh e r w in -Wil l ia ms Co . 101 Prospect Ave., N, W. Feoodod ia 1866 Cleveland, Ohio Manufacturers of Paints, Varnishes, Colors, Stains, Enamels, Lacquers, Lead Products, Dyes, Chemicals, Lithopone, Litharge, Linseed Oil, Dry Coion, Insecticides, Coal Tar Products, Disinfectants, Cleaners, Polishes. Main Plants Cleveland - Chicago - Dayton - Detroit Newark - Brooklyn - Pittsburgh Gloucester City, N. J. - Oakland, Cal.- Bound Brook, N. ). Lincoln, Neb. - Gibbsboro, N. J. - Dallas - Los Angeles CoSeyville, Kan. i Directors If A. D. BALDWIN C. P. JARDEX A. W. STEUDEL ; C. S. EATON D. A. KOHR H. D. WHITTLESEY jj GEORGE CUND GEO. A. MARTIN THOS. E. WILSON i H. h HA1N Z. E. MARTIN L. W. WOLCOTT i L. H. SCHROEDER 5 [ Officers GEO. A. MARTIN. CUimM / ik* B*atS I A. W. STEUDEL. iWaW H. D. WHITTLESEY. St**, Vict.ProU.nl H. J. MAIN. VU.-PrtaUtnl N. E. VAN STONE. VUfPrtHStnt i L. H. SCHROEDER. Vitt'PrttiStniand Trtaturtr T. G. MURPHEY. SartUry Transfers Agents CLEVELAND TRUST COMPANY Cltvitud, Ohio BANKERS TRUST COMPANY N<n York. N. Y. Registrars CENTRAL NATIONAL BANK aaveUad, Ohio GUARANTY TRUST COMPANY Nw York, N. Y.