Document jN9G7OOdZ0jrMJgGa5m4waxy

THIRTIETH ANNUAL REPORT FISCAL YEAR ENDED OCTOBER 31at, 1947 THE GLIDDEN COMPANY GLD002806 THE GLIDDEN COMPANY CLEVELAND, OHIO December 26, 1947 To tke Stockholders of The Glidden Company: The Thirtieth Anniversary year of your Company was a record year in both sales and profits. The net sales for the year amounted to {5185,753,245.89 as compared with sales of $122,439,118.69 for the previous year. The net profit for the year, after taxes and all charges except Reserve for possible additional Federal Taxes on income for prior years of $1,000,000, amounted to $13,757,984.41. This net profit, after Preferred dividends, amounts to $7.57 tier share on the present outstanding Common stock after the split-up on a two for one basis, and after deducting Treasury shares. The earnings for the pre vious year on the same basis amounted to $2.95 per share. An extra dividend of fifty cents per share has been declared on the Common stock of record December 5, 1947, payable January 2, 1948, in addition to the regular quarterly dividend of thirty-five cents per share. Under the Last-1 n, First-Out method of inventory accounting, the principal raw materials were carried on the books at a valuation of $10,279,078.22 less than replace ment cost on October 31. 1947. On October 31, 1946 this figure was $6,697,761.68. Other items are stated at the lower of cost or replacement market. During 1947 our Executive Committee authorized the prepayment of the Company's term debt of $8,000,000 due a group of banks, of which the first maturity was July 1, 1948. This is the first time in many years that the Company has been entirely free of bank or long term indebtedness. In one of the early annual reports the Founder of this Company (now Chairman of the Board) expressed his concept of the organization in the following words: "A corporation organized for profit, conceived and developed in the fixed belief that an adequate and deserved profit can only come to its stock holders through supplying a recognized demand for merchandise of merit, at just and reasonable prices, is bound to prosper. Such an organization, headed by officers with vision, initiative and determination, and with a staff of loyal employees striving earnestly to maintain the basic ideals of the institution, is sure to be a permanent and important factor in the industrial and economic development of our country." The results for the past year definitely indicate that the organization is carrying out this concept. On the last page of this report there is given a list of the Glidden Divisions and on the seventh page of the report a list of Glidden's diversified products. The policy of diversifi cation adopted by the Company many years ago has proven to be a determining factor in its growth and development. Each of the various divisions of the Company is operating satisfactorily and during the past year there have been many promotions throughout the organization, bringing the younger men into positions of administrative and executive importance. All these young men have been well trained in the organization and fully visualize the oppor tunities that lie before them. Some of the outstanding developments of the last year may be listed as follows: Our Barytes mine at Battle Mountain, Nevada has been carefully surveyed and we are pleased to report that the survey shows there is a minimum of 500,000 tons of recov erable Barytes ore in this property. GL0002807 Our Ilmenite mine in the Yadkin River Valley of North Carolina has been diamond drilled and shows proven Ilmenite ore in excess of our requirements for the next ten years. The fact that Ilmenite is a raw material from which Titanium pigments are man ufactured and that it has been necessary heretofore to import this ore from India, will indicate the tremendous benefit the company will derive from this mining operation. In the Chemical and Pigment Division at St. Helena, Maryland, a complete new process for recovering Cadmium Metal from zinc and copper slags has been installed and is working satisfactorily, producing the necessary cadmium liquors for use in our manufacture of Cadmium Colors. There has also been installed at that plant a complete battery of Black Ash Roasters, producing Barium Sulphide at a considerable saving in cost. In the Durkee Famous Foods Division new additions have been completed at our plant at Elmhurst, New York and at our plant in Berkeley, California. New Mayonnaise and Salad Dressing plants have been put into operation at Norwalk, Ohio and Chicago, Illinois. In the Soya Bean Division a new extraction plant is now being installed. In the Naval Stores Division a Synthetic Resin plant has been completed at Jackson ville, Florida, and a new Destructive Wood Distillation plant put into operation. In the Paint and Varnish Division several new products have been added to the list and additional manufacturing facilities provided. In the Metals Refining Division a new reduction furnace has been devised which results in great savings in operation. In the Glidden Feed Mill Division new and more efficient processing machinery has been installed. In the Vegetable Oil Division a new Linseed Oil refining plant has been installed at our plant in Buena Park, California. This plant will produce all the necessary grades of treated and refined Linseed Oil. In all of the thirty-five plants operated by the Company large sums have been ex pended in maintenance and repairs and in mechanization of the various operations. The Company is continuing its policy of Industrial Research in all Divisions and a new Soya Bean Research Laboratory is now being constructed in Chicago which will incur the expenditure of approximately 3800,000. It is the company's policy to hedge its position on important commodities such as cottonseed oil, soya bean oil, soya beans, etc. insofar as possible, outside of the regular working inventories, which are partly hedged by customers' orders on hand. Our diversified operations are concerned with the production of essential materials and as our plants are modem and efficient and our organization well coordinated, we look forward to satisfactory results for the new fiscal year. Our labor relations throughout the year have been cooperative and friendly, and during the year the Company has extended its Disability Benefit Plan for Hourly Em ployees to additional plants and has provided Accidental Death and Dismemberment Group Insurance in an amount equal to its Gratis Group Life Insurance for both hourly and salaried employees. On behalf of the Board of Directors we desire to express our appreciation of the fine cooperation of the whole organization during the past year. Yours truly, ADRIAN D. JOYCE Chairman of the Board DWIGHT P. JOYCE President GL0002808 CONSOLIDATED The Glidden Company t October ASSETS CURRENT, ASSETS Cash.................................................................................................................................................8 5,633,490.02 Dominion of Canada Victory Loan Bondi............................................................................... Trade accounts receivable (include! note* 1102,398.09)............................... $11,899,776.60 Less reserve....................................................................................................... 278,936.39 175,000.00 11,620,840.21 Inventories--raw materials, in process, and finished goods: Principal raw materials are strted at cost (last-in, first-out method) which did not exceed replacement market; other items are stated at the lower of cost (accumulated average) or replacement market................................................... Other current notes and accounts receivable and advances, less reserve of 88,985.55 ...................................................................................................................................... 28,104,527.11 887,499.96 To t al Cu ml ek t Assrrs......................................................................................................... 846,421,357.30 OTHER ASSETS Cash surrender value of life insurance...........................................................3 Miscellaneous notes arid accoints receivable, advances and investments, less reserve of 813,430.43 ............................................................................... Estimated refund of federal ami dominion taxes on income of prior years . 700,579.75 553,314.44 300,284.83 1,554,179.02 PROPERTY, PLANT, AND EQUIPMENT Gross amounts represent cost less write-down in 1932 Land ...................................................................... Buildings, machinery, and equipment................ Less reserves for depreciation, depiction, and amortization $ 2,538,803.74 34295,088.56 832,833,892.30 15,209,800.42 17,624,091.88 DEFERRED CHARGES Prepaid insurance and expense!.................................................................................................. 653,258.11 866,252,886.31 i 0L000t*q BALANCE SHEET tnd Canadian Subsidiary 31, 1947 LIABILITIES, CAPITAL STOCK, AND SURPLUS CURRENT LIABILITIES Account* payable..........................................................................................................................$ 7,400,850.42 Accrued taxes, royalties, interest, and insurance....................................................................... 541,996.58 Federal, state, and dominion taxes on income--estimated............................2 8,766,936.62 Less United States Treasury Savings Notes............................ 1,500,000.00 7,266,936.62 To t a l Cu r x e n t Lia b il it ie s ....................... $15,209,783.62 RESERVE For contingencies......................................................................................................................... 2,525,000.00 CAPITAL STOCK AND SURPLUS Capital stock: Convertible preferred 4)4% cumulative, par value $50.00 a share redeem able at $52.50 a share, each share convertible into approximately 1.45 shares of common stock: Authorized 200,000 shares Issued and outstanding 192,540 shares............................................... $ 9,977,000.00 Common, without par value: Authorized 3,000,000 shares Outstanding, including treasury shares, 1,784,000 shares after 2 for 1 split-up, October 24, 1947 Reserved for conversion 289,173 shares Stated capital.............................................................................................. 4,160,000.00 Surplus: $14,437,000.00 Capital surplus.................................................................. $12,581,438.41 Earned surplus (includes $2,075,163.36 of surplus of Canadian subsidiary) ................................................... 22,039,017.59 $34,620,456.00 :ss common stock in treasury (reserved for sale to cer tain officers and key employees)--26,200 shares, at cost 539,353.31 34,081,102.69 48,518,102.69 CONTINGENT LIABILITIES Letters of credit outstanding $ 1,968,707.48 $66,252,886.31 GL0002810 CONSOLIDATED PROFIT AND LOSS AND SURPLUS The Gli'ideni Company and Canadian Subsidiary Fiscal Year ended October 31, 1947 PROFIT AND LOSS STATEMENT Net sales.............................................................................................................................................*185,753,245.89 Cost of goods sold, selling, administrative and general expenses, including provision of *1,198,031.40 for depreciation and depletion....................................................... 163,450,770.37 $22,302,475.52 Other income...................................................................................................................................... 585,361.72 Other deductions: Interest, principally on long-term debt retired during the year ................$ Provision for contingencies.................................................................. Miscellaneous...................................................................................................... $22,887,837.24 136,980.33 36,872.50 183,000.00 356,852.83 Pr o f it Bef o r e Tax es o n In c o me ......................................................................................$22,530,984.41 Taxes on income: Provision for the year--estimated: Federal income taxes...................................................................................... $ 8,500,000.00 Dominion and state taxes ............................................................................... 273,000.00 8,773,000.00 Co n s o l id at ed Net Pr o f it ..................................................................................................... $13,757,984.41 Appropriation for possible additional assessment of federal taxes on income of prior years (added to reserve lor contingencies)................................................................... 1,000,000.00 Amo u n t Tr an s f er s f .d t o E ar n ed Su r p l u s ...................................................................... $12,757,984.41 CAPITAL SURPLUS SURPLUS Balance at November 1, 1946 and October 31, 1947 ............................................................... $12,581,438.41 EARNED SURPLUS Balance at November 1, 1946.......................................................................... $11,668,968.63 Add portion of net profit transferred from profit and loss............................ 12,757,984.41 Deduct cash dividends paid: Convertible preferred--$2.25 per share........................... Common--$2.20 per sh: re (prior to stock split-up). . . $24,426,953.04 448,985.45 1,938,950.00 2,387,935.45 Balance at October 31, 19-17 ...................................................................................................... 22,039,017.59 To t al Su r pl u s a t Oc t o ber 31, 1947 ...............................................................................$34,620,456.00 GLD00?811 ERNST & ERNST CLEVELAND UNION COMMERCE UUICDINO Board of Directors, The Glidden Company, Cleveland, Ohio. We have examined the consolidated balance sheet of The Glidden Company and its Canadian subsidiary as of October 31,1947, and the consolidated statements of profit and loss and surplus for the fiscal year then ended, have reviewed the system of internal 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 com panies 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. In our opinion, the accompanying balance sheet and related statements of profit and loss and surplus present fairly the consolidated position of The Glidden Company and its Canadian subsidiary at October 31, 1947, and the consolidated results of the ir operations for the fiscal year, in conformity with generally accepted accounting principles applied on a oasis consistent with that of the preceding year. Cleveland, Ohio December 15, 1947 ERNST & ERNST Certified Public Accountants DIVERSIFIED PRODUCTS BY GLIDDEN FOODS Durkte's Famous Dressing Durkee's Margarine Durkee's Shortening Durkee's Salad Dressing Durkee's Shred Cocoinut Durkee's Spiers Durkee's Worcestershire Sauce Special ingredients for Bakeries and Confectioners SOYBEAN PRODUCTS "Alpha'* Protein* Procein Fine Chemicals Lecithin Soya Meal Sterols Hormones Soya Flour Soya Flakes LIVE STOCK AND POULTRY FOODS Glidden Cattle and Hog Feed Glidden Poultry Feed Vitamin amd Growth Products PAINTS, VARNISHES ASTD LACQUERS SPRED SPRED LUSTER Jjp*A-Lic Ripotin Laarucl Siiray-Ds jr-Lite Glidair Aviation Finishes Endurarvx House Paint Gliddeas>ar Varnish NubeHtc Industrial Paints Industrial Lacquers, Enamels tad Varnishes Finishes for all Manufactured Produr u GLID*N Specialties 5% DOT Liquid Cleaners Floor Wax Weed Killers VEGETABLE OILS Soybean Oils Cocoanut 03s Cottonseed Oils Peanut Oils Corn Oils Palm Oils Linseed Oils CHEMICALS AND PIGMENTS Titanium Dioxide Lithopooe Cadmium Colors Litharge Rad Lead Euicoei Whim Lead Cuprous Oxide Dry Colors Zinc Sulphate Crystals Copperas Coal Tar Products METALS AND MINERALS Powdered Iron and Copper Powdered Lead aod Tin Glidden Type Metal Barytes Barium Products Ilmeoite NAVAL STORES Pigmentar Rosins Guai*a>phene Camphene Metal Retinites Alpha Piaene Beta Finene Turpentine NcUo Resin Charcoal Solvents Synthetic Rubber Compounds *Tfdtn*tk SbtiiUrti gl BOARD OF DIRECTORS ADRIAN D. JOYCE ROBERT K. nORSBURGH WII.UIAM J. O'BRIEN DWIGHT I*. JOYCE PAUL E, SPRAGUE NESTOR B. BETZOLD CLIFTON M. KOLB JOHN A. PETERS JOHN P. RUTH LOVELL Y. PULLIAM ALEXANDER D. DUNCAN OFFICERS ADRIAN D. JOYCE, Chairman Board of Director* ROBERT H. HORS BURGH, Vice Chairman Board of Director* DWIGHT P. JOYCE, President PAUL E- SPRAGUE. Vice President ' WILLIAM J O'BRIEN. Vice President NEWELL. BEATTY, Vice President ALEXANDER D. DUNCAN. Viee President Transfer Agent THE NEW YORK TRUST COMPANY New York City LOVELL Y. PULLIAM, Vice President JOHN P. RUTH, Vice President RALPH G. GOLSETH. Vice President JOHN A. PETERS, Treasurer CLIFTON M. KOLB. Secretary C. L- COLE. Controller W. W. CONANT, Assistant Secretary Registrar THE CHASE NATIONAL BANK New York City The Glidden Company Cleveland, Ohio The A. Wilhelm Company Reading, Pennsylvania The American Paint Works New Orleans, Louisiana Durkec Famous Foods Elston Avenue, Chicago, Illinois Durkee Famous Foods Iron Street, Chicago, Illinois GLIDDEN DIVISIONS PAINT The Campbell Paint Ic Varnish Co. Sc Louis, Missouri The Glidden Company Minneapolis, Minnesota Nubian Paint Ic Varnish Company Chicago, Illinois The Glidden Company, Ltd. Toronto, Ontario, Canada The Gliddea>Company San Fraudsco, California Adams Ic Elting Company Chicago, Illinois FOOD Durkee Famous Foods Portland, Oregon Durkee Famous Foods Lousivillc, Kentucky Durkee Famous Foods Norwalk, Ohio Durkee Famous Foods Berkeley, California Durkee Famous Foods Elmhurst, Long Island, New York CHEMICALS, PIGMENTS AND METALS Tbe Chemical Ic Pigment Company St. Helena (Baltimore), Maryland The Chemical Ic Pigment Company Oakland, California The Chemical Ic Pigment Company Collinsville, Hliaois Metals Refilling Company Hammond, Indiana Euscon Lead Company Scranton, Pennsylvania SOYA PRODUCTS The Glidden Company Chicago, Illinois NAVAL STORES The Glidden Company Jacksonville, Florida The Glidden Company Valdosta, Georgia FEED MILL The Glidden Company Indianapolis, Indiana The Glidden Company Buena Park, California VEGETABLE OILS The Glidden Company Berkeley, California The Glidden Company Portland, Oregon MINES The ChetnicU !r Pigment Company Lirytts Mines Battle Mountain, Nevada Yadkin Valley llmenite Company Lenoir, North Carolina Retail Store* and Warehouse* in the Principal Cities AFFILIATED CORPORATIONS Grovrth Prodc cts Company Pascigoula, Missisappi Zinc Chemical Company, Inc. New York, Nsw York GLD00P813