Document jmOJm0wone7L03bNnQxyoKk72

d w io h t p .j o v c * mk i io c n t THE OLIODCN COMPANY 1396 UNION COMMENCE 6UILOINO CLEVELAND M.OHIO January 14, 1952 Dear Mr. Stalker: I am enclosing your copy of our Annual Report for the fiscal year ending October 31, 19*>1. If you are a stockholder, you, of course, will receive an additional copy. We believe our key people are interested in receiving this report, and want to be familiar with it. The report, including the letter to the stockholders, is selfexplanatory, and gives you a clear picture of the strongest financial position we have ever enjoyed. It also shows the gratifying results of last year's operations. If you have any questions about this report, please do not hesitate to let me know. lours very truly, DPJtLG Enc. GLD38426 N 2578.01 efn^aAUf_ i I i I SOARO Of DIRICTORS ADRIAN D. JOYCE JOHN A. PETERS WILLIAM J. O'BRIEN JOHN P. RUTH DWIGHT P. JOYCE NESTOR B. BETZOLD PAUL E. SPRAGUE RALPH G. GOLSETH CLIFTON M. KOLB ALEXANDER D. DUNCAN B. W. MAXEY orricits ADRIAN D. JOYCE, Chairman, Board of Directors DWIGHT P. JOYCE, President PAUL E. SPRAGUE, Vice-President RALPH G. GOLSETH, Vice-President NEWELL BEATTY, Vice-President JOHN A. PETERS, Vice-President and Treasurer JOHN P. RUTH, Vice-President B. W. MAXEY, Controller ALEXANDER D. DUNCAN, Vice-President R. D. HORNER, Secretary W. W. CONANT, Assistant Secretary APPOINTID OrriCIRR WILLIAM J. O'BRIEN, Vice-President L. Y. PULLIAM, Vice-President FORD M. FERGUSON, Vice-President Transfer Agents THE NEW YORK TRUST COMPANY New York City THE CLEVELAND TRUST COMPANY Cleveland, Ohio teglstrers THE CHASE NATIONAL BANK New York City CENTRAL NATIONAL BANK OF CLEVELAND Cleveland, Ohio i GLD38427 JVeato^m/ J (f/c t/tf/'StocA/wlf/cW i January 15,1952 lOUR COMPANY'S net sales in 1951 reached a record level of $228,522,503, which is a gain of 21.2 per cent above last year and 13 per cent above the total for 1948, the previous high sales year. Unit volume of sales also was the highest on record. From this gratifying volume of business, the company achieved the largest operating profit before taxes in its history. Profits before taxes amounted to $16,000,868, an increase of $1,563,208 over 1950 and the second highest on record. Provision for income taxes, however, was $7,687,000 or 51% above the 1950 provision and resulted in a slightly lower net. Net profit after taxes and all charges was $8,313,868, com* pared to $8,561,660 in 1950. This was equal to $3.65 per share on the 2,280,238 shares outstanding at October 31, 1951. Two major financial accomplishments were realized during the year. The first of these was the successful negotiation of a long-term loan of $10,000,000, at a rate of 3 per cent, evidenced by unsecured serial aotes with the first note maturing in I 1953. This made possible the retirement of short term borrow* ings and placed the company in excellent position to meet the increased demands for working capital. A SECOND MAJOR achievement was the redemption on October 1, 1951, of the 4'A per cent convertible preferred stock. Of the 199,540 shares outstanding at October 31, 1950, there were 199,264 shares converted by the issuance of 296,745 common shares. Only 276 shares were redeemed for cash. These moves immeasurably strengthened your company by stabilizing interest rates at a favorable level, at a time when interest rates are rising, and by the removal of the senior stock issue. The company's 1952 excess profits tax base is approximately $19,000,000, which at current tax rates will allow earnings of approximately $4.00 per share on 2,280,238 shares now out standing before excess profits rates apply. Our inventories are well balanced and exceptionally low in relation to sales volume. Gross inventories of $34,337,126. before deduction of LIFO Reserve, are $759,080 below last year. Under the LIFO plan the company has a reserve of $3,226,652 to take care of market variations. WORKING CAPITAL at October 31, 1951 totalled $46,416,236, an increase of $7,996,199 over a year ago. The net worth of the company increased $3,544,492 to $69,738,651. Net plant additions during the year amounted to $4,499,196. and maintenance expenditures were $2,782,457. Since the be ginning of 1946, net plant additions have amounted to $21,456,383. Your company's properties are all in excellent condition and no large expenditure for plant is contemplated for 1952. Among the important additions in 1951 was the new titanium plant at Baltimore, which is now in full production. During the year a favorable settlement was effected with the federal government on our open tax matters through the year 19^7. We do not anticipate any major adjustments in the re maining open years. The company's retirement funds for employees now total S3.798,805, deposited with bank trustees. Our wholly owned Canadian subsidiary enjoyed a highly satisfactory year, with a profit gain before taxes of 42 per cent. One of the most promising of the year's developments was the agreement made with the Defense Minerals Administration for exploratory diamond drilling on the company's zinc prop erties in California, with an accompanying plan for opening up these mines. Half the cost of this exploratory drilling will be borne by the government. These mines were closed in 1927 because zinc concentrates were selling at $30 a ton, and to have continued operations would have meant depleting the ore at no profit to the company. The price of zinc concentrates is now approximately $135 per ton and the prospects for these prop erties are very bright. Diamond drilling started on December 17th. COMPANY, like other large users of soya beans, was affected by the Chinese speculation in this commodity early in 1951. During the first half of the fiscal year markets advanced sharply and then reacted, creating a number of difficulties which were ultimately surmounted by our fine organization. Completed last summer was a new soya extraction unit in Buena Park, California, one of the first of its kind on the Pacific Coast. A highly flexible operation, it can process soybeans, flaxseed and safflower seed. It is the first to produce 44 per cent meal for the West Coast's rapidly expanding poultry industry and will help cut poultry losses when floods and other trans portation tie-ups delay shipments from midwestern soya meal producers. Production rate exceeds rated capacity, since Glidden w\ engineers were able to incorporate several features previously used in your company's Chicago and Indianapolis solvent ex traction plants. La TE IN the 1951 calendar year your company achieved a major victory both for Glidden and for all of American industry when a jury in a Pittsburgh federal court cleared The Glidden Com pany and E. I. du Pont de Nemours Sc Co. of charges of price fixing. Vindicating your company's stand, this just and highly gratifying verdict ended litigation which began in 1948 and which not only caused great expense but interfered materially with the conduct of our regular business. This victory was especially noteworthy because most other major paint manufacturers and a number of individuals had been similarly charged. All of these concerns, except Glidden and du Pont, pleaded nolo contendere and accepted relatively small fines. Your company's determination to defend its splendid name and reputation proved to be more than sound and The Glidden Company has been extolled by editorial and financial observers throughout the country as a courageous defender of the Ameri can system. This case has also brought into sharp focus the great need for Congressional legislation which will enable innocent de fendants to recover their expenses. During the fiscal year just ended all divisions of your com pany maintained or improved their position. Although we face another year which is difficult to forecast, your officers and directors are confident your compaoy will continue to make substantial progress. The loyal cooperation of all executives and employees is gratefully acknowledged. ADRIAN D. JOYCE, Chairman of the Board. DWIGHT P. JOYCE, President GLD3843l quality products tlrfmrgfi llVER SINCE The Glidden Company was founded by Adrian D. Joyce in 1917, research has been one of the most important factors in the growth and prosperity ol the company. From your company's faith in imaginative, creative research, in development of new and better raw materials and better production methods, have come the fine products which have made the name "Glidden" a household word and which have made your company one of the world's most important producers of materials and products for industry. Among the most famous Glidden products are: Spred Satin, the rubber base interior paint which almost overnight revolutionized the paint industry; cortisone, vital sex hormones, growth factors from fish solubles, alpha protein, cadmium colors, camphene and countless others. During 1951 the energies of some 300 scientific workers were devoted to research. Their resourcefulness was largely responsible for increased output despite serious shortages in vital raw materials. Their work was invaluable. Glidden now operates twenty-eight laboratories in which the search for im provement goes on continually. The raw materials used -- many of them pro duced by Glidden -- and each of the thousands of Glidden products are carefully checked to assure the highest possible quality at all times. On the following two pages is an illustration of the nature and extent of The Glidden Company's research activities. Materials from the farm, the mine, the forest and the sea are analyzed, refined, combined and, in a sense, created to provide the nation with the finest products of their kind obtainable. GLD38432 GLD3843* ASSETS CURRENT ASSETS Cash.............................................. Trade accounts receivable, less allowances of $523,330.98 for doubtful accounts.............. Inventories--raw materials, in process, and finished goods Principal raw materials are stated 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, advances and investments............................ TOTAL CURRENT ASSETS .... $13,036,143.43 15,618,863-92 31,110,474.20 2,787,281.79 $62,552,763.34 OTHER ASSETS Prepaid insurance and expenses...................... $ Cash surrender value of life insurance.............. Miscellaneous notes and accounts receivable, advances and investments............................ 865,515.68 791,199.50 771,718.81 2,428,433.99 PROPERTY, PLANT, AND EQUIPMENT Gross amounts represent cost less write-down in 1932 Land............................................................ $ 2,927,117.31 Buildings, machinery, and equipment. . . 47,244,526.12 $50,171,643.43 Less accumulated depreciation, depletion, and amortization................................... 19,277,661.72 30,893,981.71 $95,875,179.04 6LD38A35 GLIDDEN COMPANY AND SUBSIDIARIES OCTOBER 31,1951 LIABILITIES, CAPITAL STOCK, AND SURPLUS CURRENT LIABILITIES Accounts payable........................................................................... $ 5,558,420.67 Accrued taxes, insurance, royalties, and interest.......................... 1,195,005.79 Federal, state, and dominion taxes on income -- estimated . . 9,383,101.17 TOTAL CURRENT LIABILITIES.................................. $16,136,527.63 LONG-TERM DEBT Serial notes payable, maturing $1,500,000.00 annually July 1, 1953, to 1956, inclusive, and $4,000,000.00 on July 1, 1957, interest 3%........................................... ... ................................... 10,000,000.00 CAPITAL STOCK AND SURPLUS Capital stock: Common without par value: Authorized 3,000,000 shares Outstanding including treasury shares, 2,291,330 shares Stated capital.............................................. $ 5,728,325.00 Capital surplus.................................................... 26,875,642.41 $32,603,967.41 Earned surplus (includes $3,023,780.35 of surplus of Canadian subsidiary) $37,387,789.87 Less 11,092 treasury shares, at cost (including 9,261 shares reserved for sale to certain officers and key employees)..................... 253,105.87 37,134,684.00 69,738,651.41 $95,875,179.04 SU -- Assets of Canadian subsidiary included herein comprise net current assets and miscellaneous other assets, $2,110,591.31, after adjusting for exchange at October 31, 1951, and property, plant, and equipment, $585,454.62, at cost to the subsidiary. CLD38436 ' Heome/ a*u SutyduA- THE GLIDOEN COMPANY AND SUBSIDIARIES Fiscal yaar ended October 31,1931 INCOME Net sales.......................................... $228,522,903.18 Cost of goods sold, selling, administrative and general expenses, including provision of $1,730,546.56 for depreciation and depletion..................................................................................... 212,614,663.72 $ 15,907,839.46 Other income................................................................................. 427,181.71 $ 16.335,021.17 Interest expense............................................................................. 334,152.81 INCOME BEFORE TAXES ON INCOME............. $ 16.000,868.36 Taxes on income--estimated: Federal normal income tax and surtax . . . $7,230,000.00 Dominion and state taxes............................ 457,000.00 CONSOLIDATED NET INCOME......................... $ 7,687,000.00 8,313,868^36 Soft A -- Consolidated net income includes $346,435.81 for the Canadiaa subsidiary representing that subsidiary's net income for the year after giving effect to adjustment of its net current assets and miscellaneous other assets to rate of exchange at October 31, 1991. CAPITAL SURPLUS SURPLUS Balance at November 1, 1950 ..................................................$ 17,732,104.40 Add credit arising from conversion of con vertible preferred 4 Vi % cumulative $50.00 par value shares, to common shares with out par value............................................................................ 9,143,538.01 BALANCE AT OCTOBER 31, 1951..................... $ 26,875,642.41 EARNED SURPLUS Balance at November 1, 1950 .................................................. $ 33,988,203.01 Add net profit for the fiscal year.................................... ... 8,313,868.36 Deduct dividends paid: $ 42,302,071.37 Convertible preferred -- $2.25 per share.. $ 402,154.75 Common --$2.25 per share...................... 4,512,126.75 4,914,281.50 BALANCE AT OCTOBER 31, 1951..................... $ 37,387,789.87 j GLD38437 tier t) tit ntwtii end Mttt mtdtnt t/ Tit GlitMtn Ctmpm'i /tcilititt it lib Dtrktt'l Mtrgsritt pltmi at Gf*rti*t The Gliddea Compear dereked. Ohio The A. WUhdm Compeer Reading. Pennsrlreoie The American Paint Works New Orleans. Louisians Durkce Famoue Foods Elstoo Ateoue, Chicago, III. Durkee Famoee Foods , Iroe Street, Chicago. Illinois Durkee Famoee Foods Norwalk, Ohio MINI The Campbell Paint t Vernish Compear St. Louie, Missouri The Gliddee Compear v Minneapolis, Minnesota Nubiaa Paint k Varnish Co. v Chicago, lilioois rooo Durkee Famoue Fooda Portland, Oregoo Durkee Famous Fooda Louisville, Keatnckr Durkre-McCadam Cambridge, Massachusetts The Gliddaaa Compter, Lid. Torooto. Ootario, Caaada The GUddeo Compeer See freedeco, Califoreie Adame A Etdne Compear Chicago. IUieoie * Durkee Famoue Foode Berktier. California DBSsrs;iisiuN.v. i Durkee Famoue Foods Macon. Georgia CHIMKAL1, PIAMUfTt AND MITAU The Gliddee Compear Chemical k Pigmeat Dieieioa St. Helena (Baltimore). i Maerlaed The Gliddea Compear Chemical A Pigment Dieieioa Collinsville, lUiooie The Gliddea Compear Chemical A Pigmeat Dieieioa Oakland. California The Gliddea Compear Cheasical A PigmeM Dieieioa v Hemstood. Iodieoe The Gliddea Compear ,' Kastoa Lead Dieieioa ' Scranton, Paanerlsraaia s o y a pioeucn The Gliddea Cotapear Chicago, Illinois The Gliddea Compear 7 Indianapolis, Indiana The Gliddea Compear. Buena Park. California n a v a l iiom The Glidden Compan Jacksonville, Florida -The Gliddea Compear . Valdosta, Georgia E. W. Colledga, Geotral Sake Agent, Inc , Jacksonville, Florida f u d mil l The Gliddea Coawaar Indiaaspolls, Indiana The Gliddea Compear Buena Park, California VUITABU OMJ The Gliddea Compear ./ Chicago. Ullaoia The Gliddea Cotwear 'Portland. Oregon Gliddea Consolidated Zinc Mine Shasta Countr. California MINIS The Gliddea Compuar Berjrtee Minas Battle Mountain, Nevada ^.^c^fSSlmMine. Leooir, North Carolina ffototf Stem ond tfartStwii la tfm PrMpal CMag AFFUATW CORPORATIONS Growth Products Compear Pascagoula. Mittitsippi Jarkcnerille Processing Corparatioa / Jacksonville. Florida l i GLD38438 ERNST 8c ERNST CLEVELAND UNION COMMERCE OUILDINO Board of Directors, The Glidden Company. Cleveland, Ohio. We have examined the consolidated balance sheet of The Glidden Company and subsidiaries as of October 31, 1951, and the related state ments of consolidated income and surplus for the fiscal 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 balance sheet and statements of income and surplus present fairly the consolidated financial position of The Glidden Company and subsidiaries at October 31, 1951, and the consolidated results of their operations for the fiscal year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Cleveland, Ohio December 14, 1951 ERNST St ERNST Certified Public Accountants i GLD38439 d 1 DIVERSIFIED PR t Grade AA Margaifar-*.'-''-, t'4 Mayonnaise ' I'tWMppndSalad Dreating ft Shortening Durkw't Bakers MupriM Durkee's Coconoc Durkee's Spices and Emmas Durkee's Famous Dressing Durkec's Worcesterthira Sauce Special Inaggreadients ftor Bakers and Confectioners SOTUAN PRODUCTS Alpha* Protein Protein* Soys Meal--Flour--Flakes Lecithin Fine Chemicals -- Steroids Soya Sterols Cortical and Sex Hormones Edible Emulsifiers UVI STOCK AN* POULTRY TODS Glidden Cattle and Hog Feeds Glidden Poultry Feeds Glidden Feed Concentrates FAINTS, VASNISH1S ANS LACOUOU SPRED SATIN SPILED Flat SPRED Luster Endurance* House Paint Endurance* Imperial House Paint Japelac* Ripalin* Enamel Spray-Dsy-Lite Bnuh-Dsy-Lite Speed-Wall* Gliddenspar Varnish Florenamel Pti-namel Glidair Aviation Finishes Nubelite Nubeion Glid-Tone Stains Industrial Paints, Lacquers, Bnameis and Varniahes Soybean Oflf Cottoessed Oils Cocoaas Oils Peanut Oils . Corn Oils Palm Oils Linseed Oils CHMUCMS AMO HMWW Zopaque* Titanium Dioxide Sunolith* Lithopone Cadmblith* Cadmium Colon Eustoa* White Land Bleached Baryte* Copperas Zinc Sulphats Crystal* ... Coal Tar Products MRA&S ANO MIWALI Powdered Copper and Lead Cuprous Oxida Cupric Oxide >: Cubood* Braxing Compound Barite Ilmenite NAVAL nOUS Nelio* Rosin Sunny Sooth* Turpentine Pigmentar (Pin* Tar) Alpha Pioene Guai-a-phcne* Glidcol Anti-Skinniog Agent* Terpen* Chemical! Camphene Rosin Oils Gloss Oils Terpcx Mere* Metal Resinates Pine Wood Charcoal Rubber Compounding Agenu *TtJh Mart RghssrW Mmfc o# Ttm 0Addsa Can'pony's fcwfcm if;'- md production of itnv mefhrUk far *db o offcw hdwrtrfes. ""`sssfc* Glidden X GLD3 6*<t0