Document wDgB5njLe99ZY8mOnVZOBRk6o

DownloadViewSend us a messageRandom document
ROTES TOR ANNUAL MEETING December 8, I960 \ N13454 GL001B687 r I Balance Sheet Review NOTES FOR ANNUAL MEETING December 6, i960 A. Cash and Banking The Glldden Company maintains the following bank relationships: Olidden Ltd. tot'l. Major Account andCredit Line Banks Other Bank Relationships Total 21 124 lg 3 2 l 4 2 Z CS Total Number of Bank Accounts 188 9 10 Cash is collected at 145 collection points in the U. S. and Canada, and is deposited in local bank accounts. In addition, 15 post office lock baxeB are operated under arrangements with banks for servicing and depositing of funds received. Funds are then moved by depository transfer check and bank wire to 19 regional collection centers and are under the control of the Head quarters Banking Department. Invoices are paid by a central Accounts Payable Department and Division Ac counts Payable Departments which maintain working fund accounts. Small items in the branches are paid by issuance of an envelope draft. Funds are transferred to working fund accounts periodically by the Headquarters Banking Department, using bank wire and check transfers. Freight Payment Plans are vised at two banks. Night depository arrangements are in effect where beneficial. B. Short-Term Securitise At August 31, 1966 we reflected $6,484,490. of short-term securities at cost on the Balance Sheet. These consisted of the following: U. S. Government Bonds and Certificates Commercial Paper Government Agency Obligations $ 3,005,074. 2,977,385. 502,031. $ 6,484,490. All of these securities had maturities of less than one year and were, in gen eral, placed to mature coincidentally with Dividend, Interest and Tax payments. Raring the year our average short-term portfolio waa $4,558,000. The average after-tax Interest income was 2.19$ (4.54$ equivalent before tax). ) CLD018888 Page 1 NOTES FOR ANNUAL MEETING I bal an c e s h eet r ev iew C. Accounts and Rotes Receivable - Trade (OOO omitted) 8/31/60 Accounts Receivable Notes Receivable Total Reserve for Bad Debts and Allowances Ret per Annual Report $18,919 $19*293 565 $16,728 * Bad Debt Reserve to Receivables 2.95" Fast Dus Receivables: Dollar Amount * of Grose Receivables $ 1,864 9,7* Receivables Charged Off $ 271 Recoveries Against Receivables Charged Off 110 Ret Bad Debt Loss I l6l Bad Debt Loss as * of Sales: 8/31/59 $17A9^ 223 WM , 512 $16,905 2.9* $ 1,215 7.1* $ 222 102 $ 120 Agut 31, 1958 Excluding CShsmurgy Total $17,448 3*3 $17,796 519 $17,277 2.9* $20,357 348 $20,705 529 $20,176 2.6* $ 1,108 6.4* .$ 198 74 $ 1,113 5-** $ 198 74 r~m \ I960 .08* 1959 -0636 1958 .06* 1957 -09* 1956 .04* 1955 .02* Accounts receivable turnover fop entire company approximately 36 days. Ibis compares to 32 days In 1959 end 35 days in 1958* Soaevbat clover turnover reflects continuing trend over recent years affecting all Industry and accelerated during recent period of tight money and high interest rates. National nedian approximately 35 days for all types of business. Bad debt losses of $271,000 represent 23* increase over prior year. Dun & Bradstreat reports increase of 23* in failure liabilities for all.business for first 6 months of i960. Reports failure rate per 10,000 concerns for period vas 56, the highest rate since 1941. In addition to general business conditions, trend of company to sales through branches Influences our bad debt losses and turnover of receivables. Instead of dealing vith a smaller number of larger firms performing a distribution function, ve now deal directly vith vide range of accounts formerly serviced by distributors, and this leads to increased losses and slower turnover. Secondly, branch credit functions per formed by less coupetent and, veil qualified personnel than those employed in regional GLD018889 Rage 2 HOSES FOR AHHtftL MSETIBO I MIA9CE SHEET REVIEW C. Accounts and Hbtea Receivable - Trade (000 omitted) - continued offices, and this has had similar affects. A percentage breakdown of total receivables by major division is as follows: feint Food C-P-H Organic Chemical Private ledger D. inventories lgo 64* 23# ?* 3* 555? im 64* 83* 9* 3* I_5--o1** 1958 (Excluding Chenjurgy) 62* 87* 6* 4* a* im Published inventory vas up $1,077,351 from $39,588,415 to $40,665,766 at August 31, I960. Detail is (000 omitted): i?60 August 31, 1959 Increase (Decrease) feint Food C-P-M Organic Chemical LIFO Reserve $19,897 32,147 7i750 1.897 ITOt 425 - $18,441 12,235 6,578 3.023 wm $39, $856 (88) 1,172 1(1f,1m26r) 264 $1,078 The principal items bringing about this increase of $1,077,351 were: feints - Breach finished stock up $1,112,000 of vhieh $892,000 repre sented stocks in nev branches opened in fiscal i960. With sales volume at year end slightly belov expectations, the feint Division vas $237,000 over its finished stock goals at year end Pboda C-P-M - little net change vlth oil inventory reductions at Chicago and coconut stock reductions at Bethlehem not completely offset by increased oil stocks at Louisville. Greatly increased finished stock at Adrian Joyce along vlth a small increase at Collinsville. Organic Chemical - The lack of Valdosta inventories at August 31, i960 vhieh to taled about $1,000,000 at August 31, 1959 is the principal reason for the reduced total. Inventories at fert St. Joe vere down slightly at August 31, i960 compared to the previous year end. GLD018890 Page 3 NOTES FOR ANNUAL lEETIM I BALANCE SHEET REVIEW D. Inventories - continued LIFO Reserve - Of the UFO Reserrs reduction of $264,000, $195,000 is the result of the suit of the Organic Cheolcal Division's Valdosta operation. Turnover - Published Bet Sales to year-end net inventory: i960 - 4.86 to 1 1959 - 4.94 to 1 1958 - 5.91 to 1 1957 - 5.33 to 1 Inventory control Is brought about through the joint efforts of management and operating personnel. In the Faint Division on a seal-annual basis. Finished Stock dollar goals are set up by a Headquarters Inventory Committee on a Regional basis after careful study and consultation vith Regional management. It is the responsibility of Regional management to allocate geographically and by product vithin its goal. Results are compared to goal each month, both at Headquarters and each Region; and reasons for variances are deteralned and resolved. Rav material control Is brought about by a translation of Finished Stock goals by the joint effort of production management and purchasing person nel at both Headquarters and each Region. Inventory control in the Food Division also has pars sat for total inventory by Division through the joint effort of Headquarters and Division management. Of greater Importance is the dally control exercised for Rav Materials baaed on market quotations of edible oils and condiment rav materials. The Durkee Trading Office is constantly projecting market conditions into material require ments by means of teletype communication vith Headquarters and Division manage ment. Market conditions on pepper and other materials are also projected Into requirements oh a daily basis. The respective division managers in C-P-M and Organic Chemical exercise control of Inventories as required by their individual market sources and operating requirements situations. E. Other Current Accounts and Divestments: Detail at August 31 vaa: I960 Marketable Securities (Canada) $43,750 Murgln Advances - Durkee & Hammond 62,970 Mteo. Botes and Aocts. (G.I.C.A. and from sales of property, etc.) 797,334 * 904,05* 12 $40,000 135,572 919.170 74c GLD018891 Page 4 MOTES FCfi AUHUA1 MEETING r I BALANCE SHEET WUN I*. Prepaid Insurance and Other Expenses Detail at August 31 was: I960 Prepaid Insurance Prepaid Taxes Prepaid Royalties Other Prepaids $ 330,343 3*7,572 76,887 44,211 i22 $ 460,866 113,127 105,046 0. Property Ibr schedule of major capital expenditures and 1961 projection, see page 25. Detail of lease of property to Central Soya Is on page 23, Depreciation is covered on page 12. Insurable value of all buildings, machinery, and equipment owned by the Company but excluding land and foundation Is $115,000,000. Rental obligations for buildings occupied by Company units are covered on page 8. E* Other Assets Detail at August 31 is: I960 1952 Prepaid Bond Discount and Expense Sundry Investments Advances, Deposits and Claims Mdse. Motes and Accts. Receivable $713,863 74,014 148,914 81,772 31,018,563 $744,679 40,201 175,369 563,300 $17523,549 I. Short and Long Term Financing 1. Short Term Borrowing and Bank lines of Credit Average Short Term Borrowing Fiscal I960 Fiscal 1959 Average Short Term Borrowing -0- Maximum Short Term Borrowing Amount -0- Date Minima Short Term Borrowing Amount -0- Date Year &d Balance -0- Average interest Rate Bald -0- Date of Bay-off of last Short Term Borrowing $ 87,500 4,000,000 9/1 - 9/5/58 -0- -03.516 9/12/58 At August 31# I960, we maintained a line of credit of $10,000,000 for (Hidden GLDOI8892 Page 5 NOTES PCR AKNUAL MEETIKO I BAIANCE SHEET REVIEW I. Short and Long Term Financing (Continued) X. Short Sera Borrowing and Bank Lines of Credit (Continued) (plus $1,000,000 for International). These vere carried at najor hanks across the country as follows: Bank City & State Amount The Citizens & Southern Rational Bank Atlanta, Georgia Continental Illinois Rational Bank fc Trust Company of Chicago Chicago, Illinois $ 500,000 1,000,000 The First Rational Bank of Chicago The Cleveland Tjrust Company The Rational City Bank of Cleveland Atlantic Rational Bank of Jacksonville The Florida Rational Bank of Jacksonville Bank of America, N.T.& S.A., Bell Branch Qileago, Illinois 500,000 Cleveland, Ohio 500,000 Cleveland, Ohio 1,000,000 Jacksonville, Florida 500,000 Jacksonville, Florida 500,000 Los Angeles, California 500,000 The Louisville Trust Company \ A, The Chase Manhattan Bank Chemical Bank Rev York Trust Company The First Rational City Bank of Rev York Louisville, Kentucky Rev York City Hew York City Rev York City 500,000 1,000,000 1,000,000 1,000,000 The Boatmen's Rational Bank Msrcantile Trust Company Wells Fargo Bank Ifalon Commerce Bank * International St. Louis, Missouri 500,000 St. Louis, Missouri 500,000 San Francisco, California 500,000 Cleveland, Ohio 1,000,000* Since we have not used our Credit Lines in two years, and It is not anticipated at present that vs will have need of short-term borrowing in i960, we have, since August 31, i960, reduced our lines to $7,500,000 (plus $1,000,000 for International). GLD01B893 NOTES FOR ANNUAL JESTING I BALANCE SHEET REVIEW I. Short and Long Term Financing (Continued) 1. Short Term Borrowing and Bank Lines of Credit (Continued) The Following lines have been eliminated: Bank City & State Amount Atlantic National Bank of Jacksonville Jacksonville, Florida $ 500,000 The Florida National Bank of Jacksonville Jacksonville, Florida 500,000 The Boatmen's National Bank St. Louis, Missouri 500,000 Mercantile Trust Company St. Louis, Missouri 500,000 Wells Fargo. Bank San PTancisco, California 500,000 Total Eliminated J52,500,000 2. Debenture Issue The entire indebtedness of The Glidden Company (excluding normal accounts payable, interest, end taxes) is represented by the $30,000,000 of 4-3/4$ sinking fund debentures dated November 1, 195o and due November 1, 1983. 'The Indenture provides for a sinking fund commencing November 1, 1964 to retire $1,$00,000 of debenture annually and 100$ by maturity. The debentures were offered publicly on October 28, 1938 at 99, and the effective interest cost is 4.96$ based on the net proceeds after all expenses. Annual Interest Cost Interest at 4-3/4$ Amortisation of Discount and Expense Year $1,425,000. . .30 816 $1,455,616- Month $118,750. Market price of debentures has varied from a high of 104-5/8 to a low of 96-3/4. Market price vas 103 on 8/31/60, and vas on December 7, i960. J. Contingent Liability Federal income tax returns have been audited and final settlement made through our 1959 fiscal year. We know of no unusual items for the i960 fiscal year, and have made no Bpedal reserve allowance for federal income taxes. GLD018894 Page 7 NOTES FOR ANNUAL MEETING I BALANCE SHEET REVIEW J. Contingent Liability (continued) Ho problea In government contract through renegotiation or otherwise. Total government volume of business, including state and local, is only about one percent of Ret Sales. The detail of major real estate lease commitments at August 31, i960 is (CONFIDENTIAL -- DO NOT RELEASE): Total Contract Fiscal 1961 Paint Branches Active Pending Total $ 6,298,397 , 555*201 $6*393,558 $ 1,116,674 ,. 50,695 $ 1,167,329 Bethlehem Plant Cleveland Executive Offices Miscellaneous Offices and Warehouses 354,375 1,723*294 353,980 j <>M.w 67,500 262,175 112,702 K. Stock and Stockholders 1. Common Stock (2,310,999 shares o /b at 8/31/60) The Company's common stock Is listed on the Nev York Stock Exchange, and'has unlisted trading privileges on the Midvest, Pacific Coast, and Phlladelphla-Baltimore Stock Exchange. From January 1# i960 through November 9, i960, the price of the Company 's stock ranged between a high of 49-1/8 end a lov of 34-9/8. (See Annual Report, Page 14, for prior years). During this seas period, an average of 925 shares vere traded each day on the Rev York Stock Ex change. The closing price of Glldden Common Stock on December ?, i960 vas 2. Other Coaanents on Stock a. We have no treasury stock. b. With debentures out, ve do not now see any financing with stock. c. Stock dividends are always under consideration, but ve have no plans now for such. It is felt that stock dividends only spread earnings and value over a larger number of shares, with price adjusting accordingly. GLD018895 Page 8 NOTES FOR ANNUAL NEBTXBQ I BALANCE SHEET REVIEW K. Stock and Stockholders (continued) 3* Holding* of chares as follows: _________ August 31, I960____________ August 31, 1959 NO* of Shareholders * Shares Held Avg. Ehs. BO. of Held Shareholders * Shares Held Avg. Sbs field Individuals Institutions Brokers Nominees Total 20*175 315 162 297 07969 63.12* 4.66 10*65 21*37 100.00* 72 357 1*353 1,662 no 20,253 268 179 .273 _ 20,993 64.26* 4.21 JLI.30 20,23 100.00$ 73 337 1**56 1,710 110 4. Stockholders are not given special opportunity to buy Company products, as it ii difficult to handle, impractical and unfair. \ GLD018896 NOTES FOR ANNUAL MEETING II OPERATING STATEMENT A. GROSS PROFIT Ratio to Net Sales Dollars Increase 1960 ever 1959: Due to Net Sales Increase Due to Gross Margin Increase Total i960 Increase Published 1960 1959 27.7* $54,681,588 27.2* $53,229,592 476.000 986.000 B. INCREASE IN SELLING AND ADMINISTRATIVE EXPENSE The Annual Report shows an increase of $3,811,625, or 10.4% on a Net Sales in crease of .9%. The Annual Report stated that the increase of almost $2,000,000 in selling and administrative salaries was the result of expansion of marketing and distribution programs with other contributing increases including research and development, rental of distribution facilities, and advertising and promotion, The changes broken down by major operating unit are as follows: Paint ....................................................... $2,125,000 Food ...... .......................... 735,000 C-P*M ............................. 85,000 \ Organic Chemical ....... (25,000) Headquarters ................................... 860.000 $3.780.000 PAINT - Within the Paint Division, the continued breneh expansion accompanied by increased promotion and research occasioned the 1960 Increase. Within 1960, compensation to employees of the Paint Division Increased $950,000. The break down of this increase is as follows: Office Salaries at new branches opened in 1960 . . . . Office Salaries increase In 1960 of new branches opened in 1959 Salesmen's Compensation at new branches opened in 1960 ........ ....................................................... Salesmen1s Compensation increase in 1960 of new branches opened in 1959 Regional Headquarter#' Salary increases primarily aa a result of the creation of various Regional Sales Managers, District Managers and other required accounting end stockkeeping personnel to supervise the expanded distribution system . ......... Other .................. ...................... $371,000 120,000 117,000 70,000 250,000 22.000 GLD018897 Pege 10 NOTES FOR ANNUAL MEETING II OPERATING STATEMENT. The ebove shows the reault of the branch expansion program on employee com pensation* Rent increased $219,000 in 1960 over 1959, of which $177,000 can be directly related to new branches opened in 1960 and the impact of a full year's expense in 1960 of now branches opened in 1959.. Other operating ex-, penses showed increases related to this branch expansion. Research expense increased $176*000 and national advertising $53*000. FOOD - Within increased Bales volumes at both Louisville and Bethlehem* sales men's compensation and expenses increased $221,000* but these increases were not out of line with the volume increases. Through a change in distribution methods by increased use of consignment jobbers by the refinery operations* storage charges increased $70*000. Expanded use by Bethlehem of free and re duced price deals in coconut promotion resulted in a $100*000 Increase which was partly offset by a $50*000 reduction at Berkeley. Promotional allowances granted as an inducement for the Introduction of the Durkee spice line resulted in a $145,000 increase in Bethlehem sample and allowance expense. The opera tion of the RAMAC data processing unit at Chicago and the first full year of operation of a similar installation at Bethlehem resulted in a $115,000 increase in tabulating expense. Appreciable results of these operations are already being seen in the reduction of administrative salaries, etc.* and further re sults are expected. C-P-M - Compensation to office and sales personnel increased $24,000 and is considered the full effect of 40 people* 10 sales end 30 salary* added in 1959. The other major factor in $85*000 total increase was a $27*000 increase in talesmen's expense which was again the result of the staff increases in 1959. ORGANIC CHEMICAL - Little change with slight reduction due to Valdosta disposal. HEADQUARTERS - Engineering - Salary increase of $121,000 resulting from full impact of 1959 personnel additions asking necessary many project engineers* Chemical Administration - Increased Adrien Joyce Works costs of $87,000 plus $164,000 of pre-operatlng costs at Lakehurst Mine. Paint Administration - Impact of the addition of nine people in 1959 plus increased costs of Central Region E.D.P. study and Training Program Salaries. Controller's - Almost $80*000 salary increase due^ necessary field subsidi sation of accounting trainees' salaries plus six men added to Special Services for continuing E.D.P. program. A brief statement as to cause of Increase end comparative high level of Selling rad Administration Expenses should admit to creeping increase largely tied to salaries and other expenses of added people which are Integral part of our growth program. The jump in 1959 to published 18.8% is due primarily to Chemurgy which as a division had ratio well below 10% so elimination raises overall level and also leaves unabsorbed overhead due to nonreinvestment of capital freed. Gtn0l889& Pose U NOTES FOR ANNUAL MEETING II OPERATING STATEMENT C. OTHER INCOME - PUBLISHED,? &_L The major lta tbi* y* lMt y**' re: 1960 Technical E*vice Fees Interest B*rned Gain - Disposal Capital Assets Gain - ni#Psal of Securities Other $195,006 217,436 396,107 (2,844) 30.443 $836,148 1959 $332,131 209,376 75,378 27,528 120.388 $764,801 The decrease in "idhnicalL Service Fees'' is the result of the transfer of the Glasebrooks--Austral* Ishihara--Japan contracts to Glidden International. Included in "Gain - Disposal Capital Assets" is the $275,000 gain realised on the sale of the Val^o8ta operation. D. DEPRECIATION Depreciation and amortisstlon charges for 1960 were $6,959,971 compared to $6,579,313 in 1959. Tb charge on Chemurgy properties was $2,013,837 which was more thn cover**1 bF cb* rental income of $2,175,000 from Central Soya. Most property acquired Bince 1956 is depreciated for tax and book purposes on the Sum-of*theYear*' DiEitB aethod of accelerated depreciation using the following'average lives: Buildings, 40 years; Machinery and Equipment, 20 years; and Furniture and Fixtures, 15 years. Total Dopreciatin end Amortisation Chemurgy Eetimated S-Y-0 Excess Straight Charge--Excluding Chemurgy 1960 $6,959,971 2.013.837 $4,946,134 -L?Z>m $2,998,420 1959 $6,579,313 2.100.056 $4,479,257 - 1.516,519 $2,962,738 E. FIXED CHARGES The two major items others are: thin nature which may be of concern to shareholders and Total Interest Expense - 1960 Real Estate lease'liability - 1960 $1,425,000 1,609.706 $3.034.706 see page 8 GLD018899 Page 12 NOTES FOR ANNUAL MEETING II OPERATING STATEPENT F. ADVERTISING EXPENSE Total Company Advertising X to Sales Promotion X to Sales Total X to Sales 1960 1959 $4,781,861 4,753,263 2.41X $734,411 2.41 691,547 .37X .35 $5,516,272 5,444,810 2.78X 2.76 1960 1959 Paint 3,541,064 3,448,963 By Division Food Chemical 1,759,236 1,723,816 84,879 78,281 Corporate 131,093 193,750 Total 5,516,272 5,444,810 G. RESEARCH AND DEVELOPMENT 1960 Actual 1959 ^ctual 1960 Budget 1961 Budget Xncr. 1961 Budget Over Actual 1959 Research Sales Seryice \ Control Lab. Total $1,225,340 1.744.961 $2,970,301 1.162.209 $4,132,510 $1,066,756 1.570.902 $2,637,658 982.882 $3,620,540 $1,264,250 1.851.285 $3,115,535 1.136.175 $4,251,710 $1,474,200 1.998.500 $3,472,700 1.231.000 $4*703,700 20 .OX 14.5 16.9% 5.9 13 .ex H. AVERAGE ASSETS AND PROFIT RETORN 1960 Average Assets 1960 Profit 1960 X Return Paint Food C-P-K . Organic Chemical Total Total Company $47,251,732 24,546,645 33,142,759 8.755.049 $113,696,185 $136,439,873 $6,961,752 4,232,284 3,210,572 511.663 $14,916,271 $13,638,356 14.7X 17.2 9.7 5.8 13.IX 10.0X I. MISCELLANEOUS GLD018900 Attention nay be called to ten year statistics in Annual Report. It may be pointed out, on inquiry, that all departments of the Company were operated profitably in 1960 except that the fine terpene development program at Jacksonville caused that operation to show a operating loss for I960. Port St. Joe, which was the company's only unit operating at a loss in 1959, showed a small profit in 1960. N0TB8 FOR ANNUAL MEETING III CASS USB AND PROJECTION! A. Application of PUnAs (In Thousands) Source of Funds Net Income Depreciation Total from Operation* Sale of Debentures Less Bank Loan Payments $ Sale of Common Stock under Option Plans (1960-2.71*0 sharesj 19599,680 shares.) Disposition of Fixed Assets Other Sources -Net Disposition of Heads Dividends Declared Expenditures for Property, Plant, and Equipment Changes in Working Capital: Cash (Deer.) $ Short Term Securities-Zner. (Deer.) x $ (l,4?2) (1^73) (2,945) A/C Receivable-Net;Incr, (Deer.) Inventory-Incr.(Deer.) Other Accts.-(Deer.) Notes Payable-Deer. A/C Payable-ftner.) Deer. Accrued Taxes-(facr.) Deer. Other Charges 1,823 1,077 (122) - 323 1,482 _____ 122 * 6.690 ,?> r^.3,65& m $ 30,000 26,000 98 965 145 r $ 4,621 8,764 . $ (428) 7,957 $ 7,529 1,473 now (3,271)* (939)* (806) 5,500 (1,209) (1,114) _____ m 1952 $ 7,634 6,579 $ 14,213 $ 4,000 351 202 r________ 17,893 $ 4,610 7,607 5.676 * Changes due to Chemurgy disposition are Accounts Receivable decrease of $2,898,438 and Inventory decrease of $3,756,249. GLD018901 Page 14 NOTES FOR ANNUAL MEETING III CASH USE AND PROJECTION B. FIVE-YEAR FORECAST - CASH BASIS Estimated Funds from Profit* Depreciation, Chemurgy Dispositionl and Miscellaneous Sources Less Estimated Dividends Net Cash in Flow Add Cash Balance Net Cash Available Needed for Receivable & Inventory Growth Needed for Receivable & Inventory Chemurgy Normal Capital Replacement Normal Capital Replacement-Chemurgy Operational Cash Required Remaining Fends for Growth Usage Growth Capital Mostly Approved ' x Chemurgy Balance of Funds Available for Future Growth A* of 8/31 - 000 Omitted Fiscal 1961 Next Five Years 1961-1965 Last Five Years 1956-1960 (Actual) $23,589 4,621 $18,968 13,880 $32,848 900 m 5,240 6.000 $20,708 6,417 $88,189 23.841 $64,348 13.880 $78,228 12,000 20,905 w 7,000 $38,323 9,319 $66,201 23,012 $43,18$ 13.234 $56,423 11,886 (*,503) 13,040 921 6.000 $29,079 36,623 4.076 14,291 29,004 $(11,620) Capital Protections: Paint Actual 5 Yra (1956-60) $ 9.341 1961 1962 1963 1964 4,458 1,888 1,650 1,900 1965 2,150 Estimated 5 Yra. (1961-65}$12,046 Working Capital Estimated 5 Yra. (1961-65) $7,400 Food________CPM $4,855 2,038 2,482 800 900 1,000 $28,364 3,956 1,197 800 900 1.000 $7,220 $ 7,853 Organic Total Chemical (Incl. Bdq.) $6,236 987 200 300 400 500 $49,663 11,657 5,967 3,650 4,200 4.750 $2,387 $30,224 $2,350 $ 600 $1,050 $12,000 GLD018902 Page 15 9t Akl K ft 1I{ 0\ t- J* I*5! s v 2 s Sa * 4 ! vB < < i it 4 K SB n -I s a 01 is il e> us S' 8 IA H wo J*J tA * ft H s! a <0 W 3 1 H A .* GLOO1 8 9 0 3 / NOTES FOR ANNUAL MEETING IV EMPLOYEE BENEFITS A. PentIon Plans (Continued) As of October 31, I960, the cost end market values of our trust investments ware as follow: Cost; Dollar Amount ' U.S. Salary $11,524,105 U.S. Hourly $2,835,039 Canadian , Salary $669,461 Canadian Hourly. $183,524 1 Equities Xncl. Glidden Stock 37.18% (3.831) 34,871 (3.361) 40.31 40.31 Fixed Income Convertibles 56.421 6.401 56.961 8.171 59.71 59.71 Market: Dollar Amount $12,505,516 $3,105,720 $626,128 $175,013 1 Equities Incl. Glidden Stock 45.281 0.451) 41.661 (2.971) 36.21 37.61 Fixed Income 48.781 Convertibles 5.94% Total Dollar Amount in Funds - At Cost - At Market 50.121 8.221 61.61 $15,212,129 $16,412,377 62.41 Glldden shares hold by Pension Fund are voted by Hefner & Co., as Noaineo of The Cleveland Trust Company, Trustee. B, Bonus Plan Original plan adopted February 8, 1951 and emended February 14, 1952. Administered by a Bonus Cownlttee elected by the Board of Directors. In 1955 Gilbert suggested provision preventing bonus to top officers until a certain dividend has been paid. Formula provides 12X must be earned (pre tax) on bonus net capital (capital, term debt, etc.) before providing a bonus of 7% of profit. Net Income must exceed 61 bonus net capital employed also. The 1960 computation was: Capital Stock, Debentures, Surplus (Bonus Net Capital) 121 Bonus Net Capital 122,800,684 I4,736f082 Consolidated Net Income Add: Provision for Taxes, Bonus, Interest on Debt Less: 121 Bonus Net Capital Net Bonus Income 71 Net Bonus Income (Maximum Provision) 6,690,356 8,385.000 15,075,356 16,736,082 339,274 23,749 Consolidated Net Income Less: 61 Bonus Net Capital Maximum Provision 6,690,356 7,368.041 (677685) Actual Provision ____ o. GL0018 904 Page 17 NOTES FOR ANNUAL MEETING IV EMPLOYEE BENEFITS B- Bonuo Plan (Continued) Since 1951 the maximum allowable provision was $,557,863- We have returned to profit' $952,163 leaving $1,605,700 for bonus pay out. In 1959, 124 award* vere made, totalline $209,750. The highest individual amount warded was $3,000 (to Duncan and Kelsey). A total of 1,19$ awards have been made froa 1951 through 1959- Maximus in any one year was 212, lowest 46. The highest individual amount awarded was $12,000 (to Duncan, Sprague, Ruth and Goldaeth in 1951.) Gilbert suggested resubmitting plan every five years to stockholders. We feel ve need do so only when there is a material change No bonus awards vere made In i960. The purpose of the Bonus Flan is to provide reward and incentive to those employees and officers, except the Chairman of the Board of Directors end the President, who, beyond the call of duty, contribute to the success of the Company. As provided in the Plan, each award of more than $1,000 is paid in annuel installments of 25$ of the amount awarded or $1,000, whichever is greater, and the Bonus Ooamittee deter* mines what part of any award is to be paid in cash or stock. No bonus awarded to a employee for any fiscal year may exceed 50$ of the basic annual salary of such employee at the end of such fiscal year. Ten offiber* of the Company who serve as directors, and approximately 500 other employees (including seven officers) who receive salaries of $750 or more per month > are cuxTently eligible for consideration-for bonus award*.- The -Chairman of the Board of Directors and President amy not be av&rded a bonus under the Plan. C. Stock Option* l.# 1952 Stock Option Plan Uhder this Plan 100,000 shares of authorised and unissued Common Stock vere made available. The Plan provided that no option could be granted to an em ployee after age 65, and no participant could receive options covering more than 5,00 shares. The Flan also provided that the option price could not be less than 95$ of the fair market value of the stock on the day the option was granted, and the option period could not exceed ten years from the date the option Was granted nor more then three months after retireant of a participant. All rights to exercise options terminate when an employee ceases to be an employee for any cause other than death or retirement. As of August 31, i960, options to purchase 113,670 shares (53,900 by officers and directors) had been granted under the 1952 Plan. (Option* for 20,210 shares had expired by reason of termination of employment, of which options for 18,876 shares vere reissued, as authorised by the Plan, to qualifying employees.) GLD018905 Page 18 BOIES rot ANNUAL MEETING IV EMPLOYEE BENEFITS Options representing 19,260 shares had been exercised (4,005 by officers sad directors). There were outstanding under the 1952 Flan as of August 31, I960, options for 79,400 shares (54,895 for officers and directors) exercisable ever a period of tea years free the date granted but not more than three norths after termination of a participant*s employment. A total of twenty officers end directors and 105 other employees held options under the 1952 Plan. Officers and directors named in the renunaratioa table on page held options as follows: Option Price of $35 Expiring 6-24-62 Option Price of $38 Expiring 12-27-64 Dwight P. Joyce 2,000 Alexander D. Duncan 1,120 Beauford W. Maxey 2,000 John H. Weeks 1,500 Robert D. Horner 700 William G. Phillips 500 Willard C. Lighter mmm Harvey L. Slaughter --- George M. Halsey 400 Wt David Stallcup sw<a> George S. Warner 500 All Directors and Officers as a group (including those tuned above) 9.645 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 200 800 2,000 20,800 Option Price of $37 Expiring 11-29-66 Option Pries, of $37.50 Expiring 9-29-67 Option Price of $41.50 Expiring 12-28-68 1,000 1,000 1,000 1,000 2,000 2,000 2,000 2,000 2,000 800 2,000 seeses ess . iiwm was 0U ' mww esese# e<mes 300 500 1,000 ------ 1,000 1,000 500 18,700 350 5,400 On September 29, 1959, the authority of the Company's Stock Option Ccmmlttea to grant options under the 1952 Stock Option Incentive Planwas terminated by action of the Board of Directors. 2. 1959 Option Plan Provides Committee may option 100,000 shares of authorised and unissued Common Stock. Principal differences from old plan: a. Option price not less than 100% of market (old plan 85%). Both not less than book value. h. No option to employee after age 60 (old plan 65). c. May not be terminated and reissued at lower price. d. Term of option set by Committee up to 10 years and stay not be exercised for two year# after grant (old plan all for ten years). GLD018906 Page 19 NOTES FOR ANNUAL MEETING IV EMPLOYEE BENEFITS C. STOCK OPTIONS (continued) Under the 1959 Finn, options to purchase e total of 18,900 shares were granted to 77 employees (including 9 officers) on Key 25, 1960, et e pries of $40 per share* Officers end directors receiving options were Dwight P. Joyce, 2000} Harvey L Slaughter, 1000; C. M. Halsey, 1400; P. V. Heidhardt, 400. Total options granted to all directors and officers as a group on that date amounted to 6000 shares* D. WAGE AND SALARY RATIOS Manufacturing Wages to Cost of Products Sold Total Wages and Salaries to Hat Sales Total Wages, Salaries and Benefit Costs to Bet Sales 1960 8.5Z 18.6X $36,708,653 20.01 $39,484,429 1959 8.2X 17.3X $33,932,101 18.6X $36,436,403 E. SALARIES Our salary rates, including those for officers and other key employees, including bonus, are fully in line with studies on this subject, such as by AHA. We exist be competitive in salaries and other induceaants such as stock options, to aetract and hold good men. The Proxy Statement reports that total remuneration of all directors and officers as a group increased from $640,557 in 1959 to $817,180. The principal reason for the increase is the addition of four regional vice presidents to tho officer group* These additions accounted for $111,416 of the increase. F. OTHER BENEFITS In addition to the Retirement Plan, employees are eligible to participate in a group life insurance and hospital and surgical benefit plan. During 1960, the company offered employees the opportunity to participate in a major saidical plan and an accidental death insurance plan. Also in 1960, the company formalised a previously existing salary continuation policy whereby salaried employees receive a portion of their salary in the event of prolonged illness-- the length Of continuation depending upon the employee's length of service. GLD018907 Page 20 NOTES FOR ANNUM- MEETING ( V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES A. ACQUISITIONS Our acquisition program is cn important part of our future plans. We are empha sising and will follow certain basic product approaches in our growth. First, research and development to improve existing products; second, create and Introduce new products; and third, acquisition of established companies and products in the same or related fields of interest. Acquisition of companies and products in the same or related fields gives us maximum benefit from the abilities of bur manage ment, marketing, manufacturing and research people, and from our production facilities Canadian Branches - October 1, 1960 In two separate transactions purchased paint business of Humphrey Paint and of Mowat^Grant Ltd. and Douglass Paint Ltd,, both effective October 1, 1969. Purchase prices are: Movat`Grant & Douglass Inventory Bent. Total Vancouver, British Columbia Victoria, British Columbia $112,139 24,541 $40,312 10,247 $152,451 34,788 Humohrev St. Thomas, Ontario Windsor, Ontario London, Ontario 11,995 19,960 36.925 3,640 3,136 2.187 15,635 23,096 39.112 *, \ $205,560 $59,522 $265,082 Total Net Sales of these five units in their 1959 fiscal years was $1,372,355 of which a substantial portion was sales of Clidden materials purchased from our Toronto Division. GLD018908 ! Page 21 NOTES FOR ANNUAL MEETING ( V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES B. DISPOSITION AND SHUTDOWNS Annual Sales Last Full Tear Profit or (Loss) Last Full Tear Pre-Tax Avg. Profit Profit or or (Loss) (Loss) on Last 4 Yrs. Sals or Operated Abandonment After Tax Cash & Asset Utilisation Last Full Tear Basis jUsonond 7/16/51 $ 4,076,147 Oakland 10/25/54 627,505 Feed Hill 8/10/54 4,423,653 Portland 9/18/52 2,941,393 Cambridge 7/1/55 1,308,738 Yadkin . as JoJaba - Castella ' as Barytas Mines - Buena Park 8/31/56 4,033,465 Eastern Karg, & Salad Prod. 2/1/57 9,996,668 Elmhurst Building A,8/31/57:8,8/1/58 - Scranton 6/9/58 1,100,590 St. Helena 3/31/58 - Buena Park Land 1/28/58 m' Chetnurgy 9/1/58 31,982,480 Southern Pine 2/28/58 1,070,947 Valdosta 3/28/60 2,941,738 Berkeley M. It SP.4/30/60 \ TOTAL $70,148,794 $ (234,346) $ (373,225) $ (226,221) 39,296 65,538 15,608 92,554 13,771 (60,579) (9,537) -as e m (11,032) m (67,338) 142,235 96,376 (290,471) (19,369) (6,542) (8,149) 50,597 m (253,580) (372,378) (414,580) (197,934) 52,028 - e 1,477,859 103,448 320,127 98.726 - 66,056 m m 1,503,501 68,240 156,671 66.787 (252,240) 30,690 (1,215,239) 174,957 1,258,763 (76,237) 275,301 39.176 $1,305,724 $1,065,250 $ /251.6661 $ 2,044,710 997,955 2,417,154 1,224,149 851,472 58,673 125,640 11,679 1,095,247 2,383,320 1,269,854 455,467 925,924 136,635 27,555,267* 292,555 1,430,042 684.913 $43,960,656 Fixed Assets - Sold -Abandoned Book Value $17,457,727 2.304.320 $19,762,047 Alter Tax Cash Received $19,061,554 1.198.246 $20,259,800 Excess Cash Over Book Value $497,753 * Eat lasted on exercise of option to buy property August 31, 1961 GLD018909 Page 22 MOTES FOR ANNUAL MEETING V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES B. DISPOSITIONS AMP SHUTDOWNS 1. Cheaurgy Business of entire Chemurgy Division sold to Central Soya Co. at Septeaber l, 1958, with real estate leased for three years with option to buy at August 31, 1961. Inventory Sold at Book Value Receivables Assigned Met 1960 Rental Income - (per year) 1960 Depreciation Expense 1960 Misc. Expense ~ Met Net Gain $3,756,249 2.898.438 $6 *54 687 $2,175,000 (2,013,837) (5,822) $ 155.341 The net book value of property leased at Septeaber 1, 1958 was $13,737,369 which will be reduced in each of the three years of the lease by approxi mately $2,100,000 depreciation and amortisation. The estimated net book value at August 31, 1961 will be $7,624,000 idiereas the option price Is $8,550,000. It Is estimated that the exercise of this option will result In a capital gain equivalent to $.27 per share in fiscal 1961. 2. Sale of Valdosta Operation This Operation with its fixed assets and inventories was sold to Nelio Resina, Inc. on March 28, I960. Total assets freed through this disposition on basis of last four-year average assets was $1,133,000. Fixed assets with a net book value of $225,000 were sold for $500,000 resulting In a long term capital gain of $275,000. Inventories were sold at their book value of $788,000. 3. Sale of Berkeley Margarine and Salad Products Business Berkeley Margarine and Salad Products business and its related machinery and equipment were sold to Beatrice Foods on April 30, 1960. Total assets freed on the basis of last four-year average assets were $555,818. Machinery and equipment with a net book value of $161,000 were sold for $200,000 resulting in a long ten capital gain of $39,000. Inventories were sold at their book value of $234,000. Certain warehouse space at the Berkeley plant has been leased to Beatrice Foods for a period of three years beginning May 1, 1960 at $1,900 per month. GLD018910 Page 23 NOTES TOR ANNUAL MEETING ( . V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES C, MINING ACTIVITf A twenty-ywr supply of ilnenlte ors, representing s substantial portion of requirements, was acquired In October, 1959 at Lakewood, New Jersey. A concen trating and separating plant Is planned for completion In late 1961. Capital requirements Pr B.A.R. are (do not disclose): Land and Mineral Rights Plant Authorized Capital Mine Mocking Capital Total Required for Mine Adrian Joyce Works Inventory Reduction Net Required for Project $ 700,162 3.633.080 $4,333,242 540.000 4,873,242 (3.300.000V $1.573.242 At August 31, 1960, capital expenditures to date In connection with the Lakchurst Mine were $946,630. During fiscal 1960, pre-operatlng expenses which were absorbed in Headquarters Chemical Administration were $163,604. \ CL 0018911 Page 24 V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES ( . D. MAJOR CAPITAL EXPENDITURES - I960 (la Thousands of Dollars) Expended Prior to I960 To Be Emended In Expended in i960 1961 Paint: 5 St. Louis Warehouse $ 14 Pacific Expansion, 1-2-9-12.14 Universal Reactors (5) 16 Southwest Plant Cleve. Res* tab. - Paint 9 Plant Expansion Branches All Other Paint Total Paint - 47 379 - Food: 13-21-22 33 21 22 22 13 33 22 > Deodorizers (3) Boiler Plant $ Packing, Filling, & Whse. Land and Building Spine Building Solvent Fractionation Semi-Continuous Deodorizer Plant Expansion All Other Food 536 - 31 - wm - $ 22 221 1,187 134 38 381 637 $ $2,620 456 14 372 988 287 234 591 1,516 ----- $4,458 $ 132 438 - 280 9 68 579 $ $1,506 85 563 26 138 U9 125 344 638 $2,038 C-P-M: t 32 'A.D.J. - Expansion $ 33 Kev Jersey Mine 32 Balt. Research Lab 32 Calcium Ext. Pig. Mfg. All Other C-P-M 926 572 568 - $ 2,445 375 107 - 650 $ $3,577 205 2,886 40 200 625 $3,956 ORGANIC CHS'HCAL: 71 Menthol Plant $ Pitch Stripping Column All Other Org. Chen. 378 _ $ 961 - 20 $ $ 981 707 100 180 $ 987 Headquarters: 80 218 Total Company $8,764 $11,657 Used la Axonal Report 8-10 minion GLDO 18912 Paga 25 n o t e s f o r a n n u a l me e t in g V ACQUISITIONS, DISPOSITIONS AND CAPITAL EXPENDITURES E. Extraneous Expenses StartaM development expenses at Jacksonville, Adrian Joyce Works, and Lakehurst Mine vere the or contributing factors to the .09 cents per share net reduction in 3960 (.05 in 1959)* i960 , 1959 Before Tax . After Tax Before Tax After Tax Lakehurst Mine St. Selena Adrian Joyce Works Jax. Development Loss or Default of Contractor Dumont Write-Otff Pauli Capital Gains LIFO Reversal Other 163,604 60,363 416,794 479,885 72,421 109,326 (390,466) (263,662) 78,530 29,105 200,061 230,345 34,762 52,476 m (292,850) (126,558) . 109,697 170,993 113,269 - - 9,901 (90,508) 12,606 (19.647) .. 52,655 82,076 54,369 .- 4,752 (67,881) 6,051 (12,036) 648,265 205,871 306,311 319,986 \ GLD018913 NOTES FOR AMUAL MEBEINO VI OTHER .MAJOR FU1ETI0HS AND HEMS A. Donations The donations policy of the Company provides for reasonable support to educational, velfare and charitable organizations* This policy is administered by the Daaaticns Cocnittee under the direction and guidance of the President and Board of Directors. Educational support has been given through the following: 1. Awarding of four scholarships under the auspices of the National Merit Scholarship Foundation, i960 Vinners were: Edward A. Kucler (Case); Charles J. Savoca (Georgetown); Taylor R. Durham (Cfberlin); John T. Moter (MIT) S. Cooperative Contribution Plan, under which the Company malces unrestricted grants to degree-granting universities in an equal amount to the donations made by employees of the Company to such colleges and universities. Contri buted i960 fiscal - $3,730 bo 45 colleges. 3. Chemistry lectureship grants provided to six United States universities and one Canadian university to provide for lectures by outstanding individuals and to help promote underatanding and interest in scientific achievement. 4. Outright grants to selected colleges and universities, such as Case and Western Reserve. 5* Grants to selected foundations, including Ohio Foundation for Independent Colleges. In the Welfare and Health category, the Ccsnpany has supported United Fund, Community Chest and Red Cross programs in the communities where it hen plants or branches. In addition, selective support has been given to other service organizations and foundations. Contributions are not given to sectarian groups, labor organizations, etc. Education Health & Welfare Other Total Donations i?go 45 _7 1108,233 1m m 51 59 $104,526 $69,066 70 _8 $70,811 2 of Net Profit 1.62# 1.37^ 1.14;5 .97^ Per Employee $ 17.60 $17.35 $10.95 $ 10.97 GLD01891A Paaft 27 NOTES FOR ANITUAL MEETING VI CHEER MAJOR FUNCTIONS AND HEMS (Continued) B. AUDIT 1. Ernst & Erast representatives present at the masting will he Messrs. 'N* T. Balvorseh, Partner, and A. A. Vilhelm, AssistantManager. 2, Conpany internal audit staff conducts surprise audits of all operating units on a schedule calling for visits about once each year. C. INSURANCE FIA coverage on all manufacturing properties except Canada, Buena Park, San Francisco, New Orleans, St. Louis, Minneapolis Varnish only, Portland, Tulsa, Iron Street, Collinsville and Calumet and River Elevators. This FIA. policy for fire, wind, hall, explosion, aircraft, smoke, vandalism and sprinkler FIA coverage is on agreed amount basis, with no co-insurance requirement. Locations excluded except St. Louis and Portland are under an industrial Property Floater for fire, extended coverage and sprinkler leakage. Are on co-insurance basis - no agreed amount. St. Louis and Portland are under separate'policies for fixe, extended coverage and sprinkler leakage. Coinsurance 'basis. Elevators under Underwriters Crain Ass'n. policy. Use and occupancy insurance also in FIA for locations they cover for fire, etc except Minneapolis, Atlanta, and A&E where ve have extra expense since other paint plants can make up lost production at increased cost. Use and occupancy insurance other divisions specific with co-insurance except New Orleans, St. Louis, Tulsa and Portland where ve have extra expense since other paint plants can make up lost production at increased cost. Also carry ocean marine and cargo insurance to extent necessary. Carry holler and pressure vessel insurance where necessary. All employees bonded in substantial amount. Workmen's Compensation - Ve self-insure in states where possible (ll), vith an override $1,000,000 policy for catastrophe. Self-insurance on Workmen's Compensation has saved us over $1,000,000 in the last 29 years. Also carry comprehensive bodily injury, product liability, and property damage liability. GLDO18915 Page 28 NOTES FOR ANNUAL MEETOT VI CHEER MAJOR FUNCTIONS AND ITEMS (Continued) C, Insurance - continued There vas one major fire in the i960 fiscal year* The Los Angeles Chemical Pigment and Metals Division warehouse stock in a leased location vas total loss. Recovering $55*490. Three small fires resulted in total recoverable losses of $5*392. One lightning loss $1,911. Two windstorm losses $2,635. One esgloslon of paint mill ^,151. Total cost of Insurance premiums for fire and extended coverage on buildings, machinery and equipment and inventory, plus use and occupancy and extra expense, vas $280,080 for the fiscal year i960. (This figure should not be given out.) D. FOREIGN BUSINESS a. The (Hidden Company - Export sales (both direct and indirect) totalled $2,147,251 in i960 conipared to $1,811,596 the previous year. la addition, in i960 sales to Glidden International vere $2,489,933* The Glidden Company has eleven active foreign licensees and received $136,866 in technical service fees from these licensees in i960. This amount represented a reduction frm the previous year, primarily due to transfer of licensees to Glidden International during the course of i960. A direct stock Interest is held in the following companies: Name $ of Interest Net Book Value Unconsolidated Glidden International., C. A. Ishlhara, Sangyo Kaisba, Ltd. A/S FJord-Plast Fabrics Nacional De Pinturas, S. A $ 18,018 Mano 28,040 Memo $ 46,058 Consolidated The Glidden Company Limited 100JS 50,000 $ 96.058 GLD016916 Page 29 NOTES FOR ANNUAL MEETING VI OTHER MAJOR FUNCTIONS -AND HEMS (Continued) D. Foreign Business - Continued 1) Glldden .International, C. A. - Glldden holds 99 shams (1 sham held by The (Hidden Company* Ltd.) representing a 99$ Interest. Glldden International had a consolidated shareholder equity of $594,796 at August 31, i960 vlth a book cost to Glldden of $18,018. 2) Isbiharo Sangyo Kalsha, Ltd. - Glldden holds 870,76k shares representing ft 2.24$ interest. These shares have a current market value in Japan of $286,000 at November 14, i960 on vhieh Glldden has a tax basis of $108,446 for taxes paid through August 31,196b. 3) A/S FJord-Plast (Norway) - Glldden holds 200 shares representing a 25$ interest which vas acquired on July 29, 1980 at a cost of $28,040. 4) Fabrica Nacional de Pinturas, S. A. (Cuba) - Glldden holds 31,421 shares vhieh represented a 15.1$.Interest. The company vas intervened by the Cuban government in October, i960. Accounts receivable due Glldden at this date total $28,271 and due Glldden International $17,248. Bad debt reserve of both companies are completely adequate to cover ary loss on these accounts. Glldden International received technical service fees of $64,264 from Fabrica In i960 and additional fees of $21,701 have been reported as due but have not been paid and ham not been taken Into income. No collection of v \ this latter amount Is anticipated. 5) The Glldden Company, Ltd., (Canada) - Glldden holds 100$ (4,200 shares) vith a book cost of $50,000. Shareholder equity at Arjguat 31 19&>, was $5,518,246 which Is Included In the consolidated financial, statements In the annual report for i960. Following are highly condensed financial statements for the periods Indicated: GLD018917 Page 30 Tho OllMen Company Limited Balance Sheet August 31, 19&> Current Assets Property# Plant & Equipment, Net Deferred Charges&Other Assets $**>779# 031 1,358#673 $6,140, Current Liabilities * Stockholders Equity $ 622,249 5,518,246 $6,140,495 Income Statement & Retained Earnings i960 Net Sales Co3t of Sales Operating Costs Incense from Operations Other Income Income before Taxes Provision for Income Taxes Net Income for the Period Retained Earnings, beginning of year Retained Earnings, end of year $9,618,916 5,933,530 2,939,645 $ 7457m 34,665 f~rs6,m . 385,000 $ 395,406 $5,072,840 $5,468,246 m. $8,358,782 5,322,453 2,292,475 46,029 089,87$ 391,000 $ 3957873 $4,673,967 $5,072,8110 b. Glidden International, C. A. - The company is headquartered in Ban Juan, Puerto Rico, vith retail branch operations in San Juan and Ponce, Puerto Rico, and Panama, Republic of Panama. Collection of accounts is made through the Chase Maabatten Bank, San Juan, Puerto Rico. Glidden international funds have been primarily secured from accumulated earnings and through, hank borrowings at the Union Commerce Bank, Cleveland, Ohio. At August 31, i960, this loan amounted to $425,000 with subsequent payments to date bringing the balance to $300,000. The current rate of interest is 4-1/2$. The loan is guaranteed by The Glidden Company. GLD01891Q NOTES FOR ANNUAL MEETING VI OTHER MAJOR FUNCTIONS AND USB (Continued) D. Foreign Business - Continued b GliMen International, C. A. Continued Glidden International has four banking associates: Union Commerce Bank, Cleveland, Ohio (Borrowing) Chase Manhattan Bank, San Juan, Puerto Kino Chase Manhattan Bank, Panama, Republic of Panama First National City Bank of New York, San Juan, Puerto Rico The accounts maintained include four Collection Accounts and six Working Fund Accounts. At August 31, i960, Glidden International owed The Glidfien Company $190,682 for merchandise puretoned during August, i960. GQidden international^ investments at August 31> i960 were as follows: Name $ of Interest Net Book Value Unconsolidated SoJa Glidden Argentina, S. A. Pinturas Ico, S. A. Pinturas Ecuatorianas, S. A. and Distrlbuidora Americanas, C. A. Pinturas Centro Americanas 2554 , 33-l/35o 33-1/355 33-1/355 Memo $47,504 62,837 64,850 $ 175,191 Consolidated Industrias Glidden, S. A. Glidden Panama, 8. A. 99.985fo 100$ $ 32,000 20,000 $ 227,191 1) Pintums Ecuatorianas, S. A. and Distrlbuidora Amtricena, C. A. (Ecuador) Glidden International holds 320 shares representing a 1/3 interest at a cost of $62,837. Glidden International's share of shareholder equity at September 30, i960 vas $60,377. 2) Pinturas Ico, S. A. (Colombia} - Glidden International holds 155,400 stores representing a 1/3 Interest at a current cost of $4", 504. This current cost at August 31, i960 is tee balance remaining after a writedown of $268,000 in August, i960. This writedown uas necessitated as a result of continuing operating losses of this conpany. This writedown included recognition of Glidden's portion of losses to date and writeoff of book goodwill. GL DO IS 919 NOTES FOB ANNUAL KEETIl'fG VX OTHER MAJOR FUNCTIONS AND HEMS (CONTINUED) D. Foreign Business - Continued 3) Pin-turns Centro-Americanas (Guatemala) - Glldden International bolds 154 shares, representing a 1/3 Interest at a cost of $64,650. Glldden International*s share of shareholder equity at August 31# i960 vas $^4,342. At Aiigust 31, i960, Pincasa owed Glldden Interr&tlanal $1,640, on open account. Pincasa also owed The Glldden Company $8,343 cm open account and $50,000 as a note payable at that date. 4) Soja Glldden Argentina, S. A. - Glldden International holds 10,970 shares representing a l/4 Interest (no cost basis). This company Is currently Inactive. This Interest has been assigned to Central Soya under the option agreement for the Chemurgy Division and upon exercise of that option by Central Soya, these shares will be transferred to them. 5) Industries Glldden, S. A. (Mexico) - Glldden International holds 19,996 shares representing a 99*98$ Interest. This company Is currently inactive and is carried at a cost of $32,000. In consolidation with Glldden International at August 31, I960, shareholders equity totalled $31,537. 6) Glldden Banana, S. A. - Glldden International holds 1,000 shares representing 100$ control. This company is a paint branch and Is carried at a cost of $20,000* 7) Ih Septenfcer, I960, Glldden International purchased all of the out standing stock of General Paint Company de Mexico for $4,900. An additional $60,000 vas invested through the purchase of an advance account between General-Mexico and its former parent. The latter three companies are consolidated with Glldden International for the purposes of monthly financial statements. All others are carried on Glldden International's balance sheet at cost. . Glldden International has nine active foreign licensees and received $434,571 In technical service fees from these sources In i960. This compares, vlth $67,693 for 1959 This. increase results from larger, payments from .the. previous year's paint licensees, addition of three nev paint 'licensees,and t o o new- " chemical licensees/ Billiton, Netherlands vlth Initial contract fees of $200,000 in i960 and iBhlbara, Japan's TiO* contract* This latter transfer from The Glldden Company in i960 added $897136. to Glldden International^ technicals service fees in i960. Receipts from the Ishihara (Japan) TIOg contract and Fabrics (Cuba) are not anticipated In fiscal 1961. Sales and profits of Glldden Datenational are not consolidated vlth The Glldden Company for reporting purposes. Sales and profits of Glldden International are as follows: GL D0189?0 JXWES FCR AimUAL HEETIWJ VI OTHER MAJOR FUICTIOHS AND ITEMS (CQHTXHUED) D* Foreigi Business - Continued Fiscal i960 1959 195S 1957 1956 Sains 3,255,946 2,904,516 3,012,840 1,684,178 560,112 Profits 335,0*1 82,370 68,190 56,603 32,709 The sales increase of $400,000 la Organic Chemical business and of $130,000 In total Faint business vas partly offset by decreases In both Durfcee and Chemicals-Placenta-Metals business* With the Direct Export Faint business net profit In i960 ws $35,450, compared to a loss of $49,134 In 1959* The Sato Bey paint breach Increased its net profit $23,000. With an improvement of $50,000 In the net result from Organic Chemical business, total net profit, before technical service fees and tbe special charge of $268,000 writing down the Colombian investment, vas $235,939 la I960 compared to $l4,4T7 the previous year* . MISCELLANEOUS Cost of the Annual Report this year was 23 cents per copy which was the same as last'yoar. Our 3958 Annual Report vas Judged best of the Faint and Coatings Industry by ITNAIEIAL WORLD. D. B. ERSKHB3 Distribution: Mr. Dwight P. Joyce Mr. B W. Maxey Mr. R. D. Horner Mr* W. 0. Phillips Hr. R. K. Dutton Mr. R. R. Augsburger GLD0189?!
Contact UsLoginSign Up
CUNY - The Graduate CenterColumbia University Mailman School of Public Health - Sociomedical Sciences