Document vBD24gVKz5VnVnEXKNaL7BxV9

Annual Report 1956 Th e Sh e r w in -Wil l ia ms Co . N15364 Th e Sh e r w in -Wil l ia ms Co. A. W. STEUDEL. PRESIOENT To the Stockholders: Herewith are presented the Consolidated Balance Sheet and the Consolidated Income and Surplus Statements of The Sherwin-Williams Company for the fiscal year ended August 31, 1956. The earnings before Federal Income Tax and provision for the Pension Plan are $30,397,200. The amount estimated for Federal Income Tax is $13,502,085 and $2,900,000 has been set aside for the Pension Plan. The final consolidated net earnings, after all deductions, are $13,995,115 which establishes an all-time high record in the history of the Company. After allowing for Preferred Dividends, these earnings are equivalent to $10.49 per share on the outstanding 1,277,854 shares of Common Stock as compared with $8.89 per share last year, an increase of 18%. Sales were higher than any previous year and exceeded iast year by 7.8%. Again consumers' products were chiefly re sponsible for this gain, although the industrial division of the business also contributed an increase in volume. Sales of Super Kem-Tone and Kem-Glo substantially exceeded those of any previous year and continue to enjoy the highest ac ceptance in the country in their respective fields of wall paint and all-purpose enamel. A new feature in the merchandising of these two products is free color service to consumers in the form of a Color Harmony Book which shows about fifteen hundred color combinations taking the guesswork out of putting good colors together correctly. This authoritative guide in color selection is available for lending to consumers by dealers, throughout the country. Due to our widespread distribution, as well as having our own facilities for producing this book, we are able to supply it to the trade at a very reasonable price. We have made this the keynote of our advertising in national magazines this year. In our report last year we told about the construction of a new can plant at San Leandro, California and also important additions to our Chemical and Color facilities at Chicago, namely a Phthalocyanine Blue unit and an addition to the Para Cresol Department. The Can Plant was in partial opera tion in the latter part of the fiscal year and should be in full production this next fiscal year. The Phthalocyanine Blue plant is gradually increasing its operations and the new Para Cresol unit is expected to start production in November of this year. In July of this year the Company acquired the assets of the Rubberset Company, manufacturers of brushes, with plants at Newark, New Jersey, and Gravenhurst, Ontario in Canada. Our Company has not made brushes in the past although it has a substantial market for them through its dealers and branches. This is, therefore, a very logical addi tion to the line of the Company's products. Rubberset is one of the best-known names in the brush market with an excellent reputation, having been in business since 1875. Our laboratories have this year developed a new type of automotive finish which is expected to be a very marked im provement over what has previously been available in this field. For many years our chemists have sought a finishing material that would combine all the advantages of both enamel and lacquer with none of the disadvantages of either. This new product has much greater speed in drying, levels off to a smooth, mar-free finish and dries with a noticeably higher gloss. Once again the management expresses its thanks to the organization for the loyal and intense efforts and the enthu siasm that have made this year's results possible. 3=5 * Z 2..-S -3 lSiTl..OxS ->.7<. ^>1 '" |T! ^ .F . 5S2*W3Os$in?iis..,.' OOCSjnC30w -*''i.'1.'>:SacriwaTM3*j-'*'':!l.!1'.'--W322=oo2aSni..i.''*-rr..'...' ' :< : .1 ST 3 g S:. S. i ' FI : i. | !* *B SMSf" =? g" s 3l:i S .! 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Nj 'O - o 00 1 to t-- Ok 8 S} 5} s si . 00 00 'Q bo H a w cn w ^3 z HM t-* t* z> o0 z C/3 03 0 o SC o > *o >H w ZD *< > w > z r* o> Z O O O w Z 03 C/3 Oa t-1 w Mw DH > H w O 03 G Cd 03 > w 03 S-W 000300 CONSOLIDATED INCOME AND SURPLUS THE SHERWIN-WILLIAMS COMPANY AND CONSOLIDATED SUBSIDIARIES Year ended August 31, 1956 INCOME Profit from operations for the year ended August 31, 1956, 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............ ............... $ $32,726,967 787,565 621,5011,409,066 Other deductions: $34,136,033 Provision for pensions . ...... .. $ 2,900,000 * Provision for depreciation:........ 2,741,646 Provision for foreign taxes and miscellaneous items...................................... 659,554 Ner charge arising from sale or abandonment of depreciable assets.. ...... 243,366 Interest expense........................ 94,267 Federal taxes on income: Provision for the year--esti mated.................................. $14,100,000 Adjustments for prior year.... 597,915* 13,502,085 20,140,918 NET INCOME................... ......... $13,995,115 EARNED SURPLUS Balance at September 1,1955. . .............. Add net income for the year .............................................. $65,996,886 13,995,115 Deduct: Cash dividends declared and paid or provided for during the year: Preferred--$4.00 per share .. $ 595,340 Common--$4,625 per share. 5,910,080 $ 6,505,420 $79,992,001 Premium on Preferred Stock redeemed................ 25,292 6,530,712 BALANCE AT AUGUST 31,1956.... |7jM6L289 Note A--Equity in net income for the year ended August 31,19Jd, reported by uneonolidatcd subsidiaries was approximately $497,000 more than the Company's share of dividend* paid by such subsidiaries. "Indicates red figure. 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, 1956, 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, 1956, 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 ERNST Certified Public Accountants Cleveland, Ohio October 12, 1956 Th e Sh e r w in -Wil l ia ms Co . lor Prospect Av., N.W. , Founded in 1866 , Cleveland, Ohio Manufacturers of Paints, Varnishes, Colors, Stains, Enamels, Lacquers, Lead Products, Dyes, Chemi> cals, Lithopone, Litharge, Linseed Oil, Dry Colors, Brushes, Cans, Insecticides. Main Plants : Cleveland'Chicagb-Payton'Detroit'Newarki-Pittsburgh Hubbard, Ohio-Oakland; Cal.-Bbund Brook, N. J.'Gibbsboro, N. J. Deshler/Ohio'Dallas-Los Angeles-CoffeyvilIe.Kan.-San Leandro, Gal A- H BURT S. B. COOLIDGE aS. EATON GEORGE GUND C. P. JARDEN Directors D. A-KOHR C. M. LEMPERLY G. H. ROBERTSON L. H. SCHROEDER A-W.STEUDEL C M. WHITE H. D. WHITTLESE1 THOS. E. WILSON L. W. WOLCOTT Oj^cers A. w. STEUDEL, Prriident A. H. BURT, Vice Prwident . S. B. COOLIDGE, Vice President L. H. SCHROEDER. Vice Prutdent and Treasurer B. M. VAN CLEVE. V President N. E. VAN STONE, Vice Ppendent sji. D. WHITTLESEY. VlCrPresident > F. J. SQUIRES. Secretary Transfer Agents CLEVELAND TRUST COMPANY Cleveland, Ohio BANKERS TRUST COMPANY New York, N. Y. Registrars CENTRAL NATIONAL BANK . Cleveland, Ohio GUARANTY TRUST COMPANY New York, N. Y. NV 1957 TH El 3HE.(R WIN -WILLIAMS C OM R/\ N Y S-W 0003CK