Document pB57RZg7K87JdzkmxZorOR2vk

a Capital E\peihInures mm Depreciation V .. **$ i: -Iu3! factors The company's .'ales mix mclt-dce a higher proportion of our newer products which have not ye: become fully established and. therelcre. die not produce as saiisinctory a rate of prolit as our traditional prod uct'. Increasing wage and employee benefit costs, in excess of improved productivity. could not be oKet r>\ higher prices because of competitive conditions :n most markets. Pro'its Irom Dominion Brake Shoe Company were lower for two rea sons. Although total stiles oi the company almost equaled sales in I960, some product hues were lower in volume end price because of competitive situations \lso. the ^.irivng- were adjusted downward to retlcc: the devulu.ition o> the Canadian dollar Orders Itnprtn ed and Backing Increased Total orders received in 19bI increased to SI89.100.000 from SI 60.500.OuO in I960 This significant increa'C came mostly from orders for hydrau lic products in Canada and Europe, although orders for our other product lines also improved during the second half of the year. The backlog of unfilled orders rose to S46.400.000 at year-end. com pared with S30,300.000 at December 31, I960. Over 50 per cent of this year-end backlog was for hydraulic products which normally require a longer lend time from receipt of order to shipment. Orders were continuing at a good rate in the first months of 1962. Capital Expenditures Remained High Capital expenditures in 1961. including plants and equipment of Jarry Hydraulics, were SI2,608.997. This compares with capital expenditures of SI2.1 IS.522 in 1960. During 1961. otir Canadian subsidiary entered into a contract to acquire all of the outstanding stock ot Jarry Hydraulics Limited. Canada's leading manufacturer of aircraft landing gear and airborne hydraulic systems and components. The Canadian subsidiary presently holds more than fifty per cent ot the outstanding stock ot Jarry and is obligated to purchase the re main. ng shares. The final determination ot the purchase price for all shares will depend upon Jarry's earnings over a six-year period under a formula in the purchase agreement. In September 1961. our AmForge Division purchased surplus forging equipment which has been installed in the division's Chicago plants. The additional equipment provides AmForge's entrance into the extensive market for truck a.xles and other forged parts which the division could not previously supply. A program to expand our production of cast steel freight car wheels by 120 per cent was initiated in 1961. The Calera, Alabama plant capacity was increased by 20 per cent. Plants in Toledo. Ohio, and St. Louis. Mis souri that formerly made cast iron wheels are in the process of being con verted to modern, automated, cast steel wheel plants. Both of these plants will be in full production before the end of 1962. Another important capital expenditure was an addition to the buildings and equipment at the Elyria, Ohio foundry of Electro-Alloys Division for manufacturing centrifugally cast high alloy tubing. Capital expenditures for 1962 are currently projected at SI3,000.000, of which about half is for normal replacement and modernization. Expen ditures for new facilities will include the conversion of the two steel wheel plants and construction of a plant at Marysville, Ohio by the Denison 24 s SCI 01837