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Th e Sh e r w in -Wil l ia ms Co .
N15363
Th e Sh e r w in -Wil l ia ms Co.
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A. W. STEUDEL
PRESIDENT
To the Stockholders-.
We present herewith the Consolidated Balance Sheet and Consolidated Income and Surplus Accounts of The SherwinWilliams Company for.the fiscal year ended August ol, 1955.
The earnings before Federal Income Tax and provision for the Pension Plan are $26,451,70J.
The amount estimated for Federal Income Tax is $11,772,106.
The allowance for the Pension Plan is $2,700,000.
The final consolidated net earnings, after all deductions, are $11,979,595.
This establishes a new high record of earnings in the Com pany's history.
The net amount earned on the 1,277,854 shares of Common Stock outstanding, after deducting Preferred Dividends, is $8.89 per share.
Sales again surpassed those of any preceding year. Com pared with last year, the increase is 4 percent. Consumer products, which constitute the main bulk of the Company's business, showed a gain both in sales and profits. Industrial sales also contributed a larger volume as a result of the improved conditions in the industrial field. Super Kem-Tone and Kem-Glo, the country's leading finishes in wall paint and
all purpose enamel respectively, are still running ahead of all previous years' records. This year the Kem line passed the one hundred million gallon mark since the introduction of Kem-Tone as an entirely new type of wall paint.
A major portion of the increase in this year's earnings over the previous year is due to larger profits from the growing operations in the chemical, color and can divisions of the Company. Further expansion plans are under way. The con struction of a new can plant costing about $1,500,000 is near completion at San Leandro, California, which is intended to supply the needs not only of our own plants on the Pacific Coast, but also those of other companies. At Chicago a new. Phthalic Anhydride unit is in operation. Phthalic Anhydride is a basic ingredient of alkyd resins and plasticizers. Approxi mately a million dollars has been appropriated for enlarging the facilities for the production of Paracresoh which is an important chemical base for a product used principally as an additive to airplane fuel and lubricants in general. It also plays a part in the manufacture of organic colors. Another plant now under construction, involving an expenditure of about $1,250,000, is for the production of Phthalocyanine Blues and Greens. The colors made by this process are the highest quality and most permanent available for paints, floor coverings, textiles and printing inks.
Inventories were substantially higher than at the close of the preceding year. The largest part of this increase was in finished goods and was the result of a program for leveling out production, thereby reducing costs and stabilizing em ployment.
Greater stress than ever was placed on research for the improvement: of the Company's products in all lines and the development of new ones. By introducing a tube system for mixing colors, an infinite variety of color has now been placed at the service of the American home owner. In addition, better finishes are constantly being evolved that are "tailor made" to meet the specific needs of the industrial market.
The management is confident of an ever growing potential market for its products, and is gearing its manpower to take full advantage of this prospect.
Again the management expresses its thanks to the organiza tion for its fine spirit of enthusiasm and its loyalty and support in promoting the interests of the Company.
President.
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S-W 000292
CONSOLIDATED INCOME AND SURPLUS
THE SHERWIN-WILLIAMS COMPANY AND CONSOLIDATED SUBSIDIARIES
Year ended August Si, 1955
INCOME
Profit from operations for the year ended August 31, 1955, before other income, provision for de preciation, other deductions, and federal taxes on income..
Other income: Dividends received (net) on capital stock of foreign unconsolidated subsidiaries:--Note A
Miscellaneous...................
$
Other deductions:
> $29,039,907
475,531 253,006
728,537
$29,768,444
Provision for pensions.................................... $ 2,700,000
Provision for depreciation..................................
Provision for foreign taxes and miscellaneous items
2,451,947 631,253
Net charge arising from sale or abandonment of depreciable assets......... ..........................
176,035
Interest expense................
57,508
Federal taxes on income :
Provision for the year--esti
mated..............
...
Adjustments for prior years . ..
$12,400,000 627,894*
11,772,106
17.788,849
NET INCOME. ...
....... ...
$11979,595.
EARNED SURPLUS Balance at September 1, 1954........ Add net income for die year...............
Deduct:
$60,407,834 11,979,595
$72'587'429
Cash dividends declared and paid or provided for during the year: Preferred--$4.00 per share.. $ 615,450 -
Common--$4.50 per share.. 5,750,343 $ 6,365,793
Premium on preferred stock redeemed..............
24,750
BALANCE AT AUGUST 31, 1955....
6,390,543 $65,996,886
Indicates red figure.
Note A--Equity in net income for the year ended August Jl, 1955, repotted by unconsoli dated subsidiaries was approximately 5700,000 more than the Company's share of dividends paid by such subsidiaries.
Note B--The income accounts of the consolidated foreign subsidiaries (Mexico and Cuba) have been translated into U. S. dollars mainly on the basis of rates of exchange in effect at the close of the year.
s-w 000293
AUDITORS' CERTIFICATE
Board of Directors, The Sherwin-Williams Company, Cleveland, Ohio.
We have examined the consolidated balance sheet of The SherwinWilliams Company and consolidated subsidiaries as of August 31. 1955, and the related statements of consolidated income and surplus for the 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 pro cedures as we considered necessary in the circumstances.
In our opinion, the accompanying balance sheet and summaries of income and surplus present fairly the consolidated financial position of The Sherwin-Williams Company and consolidated subsidiaries at August 31, 1955, and the consolidated results of their operations for the year then ended, in conformity with generally accepted account ing principles applied on a basis consistent with that of the pre ceding year.
ERNST S' ERNST Certified Public Accountants
Cleveland, Ohio October 11, 1955
Th e Sh e r w in -Wil l ia ms Co .
101 Prospect Are., N.W.
Founded tn 1366
Cleveland, Ohio
Manufacturers of
.Paints, Varnishes, Colors, Stains, Enamels, Lacquers, Lead Products, Dyes, Chemicals, Lithopone, Litharge, Linseed Oil, Dry Colors, Cans, Insecticides.
Mam Plants
^ Cleveland ' Chicago * Dayton < Deeroit' Newark' Pittsburgh Hubbard, Ohio - Oakland, Cal. -Bound Brook, N. J. - Gibbsboro, N. J Deshler, Ohio' Dallas - Lbs Angeles Coffeyville, Kan. 'San Leandro, CaL-
A. H. BURT S. B.COOLIDCE C: S. EATON GEORGE GL'ND CLP. JARDEN
Directors
D. A. KOHR C. M. LEMPERLY G. H. ROBERTSON L. H. SCHROEDER A. W. STEUDEL
C. M. WHITE H. 0. WHITTLESEY THOS- E, WILSON =
C W. WOLCOTT
Ojjicers
A. W. STEUDEL, Predent A. H. BURT, Vice President : S. B. COOLIDGE, Vice Preside* L. H. SCHROEDER, Vice president and Treasurer B. M. VAN CLEVE, Vice President N. E. VAN STONE, Vice president H. D. WHITTLESEY, Vice President
F. j. SQUIRES. Secretary
Transfer Agents
CLEVELAND TRUST COMPANY Cleveland, Ohio
BANXERS TRUST COMPANY . New York, N. Y.
Registrars
c en t r al n at io n al ban k Cleveland, Obto
GUARANTY TRUST COMPANY New York, N. Y.
s-w 000295