Document x1aq4Z54KYR4n5j48n5rGyBb6

Th e Gl i .d d e n ft Co mp a n y ;r:r>:.\ '.--wjy*- sr*.v**:1te war* ; er-tV.A ; . , ' CLEVELAND, OHIO 'Li' ' !.- * Sf* :. i3 I December 31, 1931 TO THE SHAREHOLDERS: On behalf of the Board of Directors, I present herewith the Annual Report of the Company and its subsi diaries as of the close of business October 31, 1931. It is gratifying to report that after all charges the Company has been able to show a substantial improve ment in profit over the previous year. In analyzing the Balance Sheet, attention is directed to the good liquid position, the relation of Current Assets to Girrent liabilities being in the proportion of approximately fifteen to one. The total sales for the fiscal year, not including inter-company and subsidiary sales and transfers, amounted to $28,305,172.66. While it is true that in line with the general curtailment in business activities the Com pany's sales for the period show a decline in dollar value, it should be understood that due to lower prices, the units of output show a much smaller decline. The Company has not only succeeded in maintaining its place in the business world but has strengthened its position greatly by the addition of new customers and new sources of output, therefore with any upturn in busi ness it can reasonably be expected that a greatly increased sales volume will follow. The decline in the price of commodities anil raw materials currently purchased and entering into our manu facturing operations continued throughout our whole fiscal year so that it was necessary for the Company to absorb heavy losses against these operations, especially on vegetable oils and on metals, of which very large quantities are used in its operations. This penalty against profits amounted to over one million dollars. The total of inventories show a large reduction as compared with the previous year and were taken at the lower of cost or market. Commodity markets are so low at this time that it can reasonably be expected that there will be no additional losses along this line. Throughout the year a well devised plan was followed for absorbing all known losses and prospective losses against the operations and during the year a substantial nonrecurring charge for advertising was also absorbed. The plants and manufacturing facilities of your Company have been maintained in excellent condition, and despite the liberal charge-off for depreciation, all expenditures for maintenance and repairs have been Included in our operations. Recognizing the changing commercial conditions of the present economic era, your Directors have striven to keep this Company in a sound financial condition and very careful attention has been given to effecting reduc tions in expenses and in conducting all operations on the soundest and most economical basis. At the same time we have continued the work in pur Research Laboratories and have developed several new products of outstand ing merit which we will place on the market with the return of better business conditions. The Company's policy of diversifying its products has proven to be sound and it Is apparent that if business conditions become reasonably stable that the Company should enjoy greatly increased profits even though the volume of dollar sales should he no greater the next fiscal year than for the previous year. ... ..... During the year the Company has taken advantage of the low market prices for its securities and has purchases in the open market in varying amounts of the respective issues. These securities have either been held in the Treasury or have been retired as reflected in the report. Since the dose of the fiscal year, additional purchases of the Company's debentures have been made and these will be retired shortly. The organization has a very effident personnel and the officers at all times have die dose cooperation of all the employees. At this time the Officers and Directors wish to express their appreciation of this cooperation in meeting the unusual conditions during the past year. - - ' - . :\ Yours truly, ADRIAN D. JOYCE, N13442 GLDO02979 President. CONDENSED CONSOLID ... JTHBJ GBIDDEN COMPANST-CU i ' "" /AS OP THE CLOSE OP B1 Current ASSETS Cash on Hand, on Deposit and in Transit Customers' Notes and Acceptances Receivable Customers' Accounts Receivable Less: Allowance for Doubtful, Discounts, etc. Miscellaneous Current Accounts and Creditors' Debit Balances Inventories--Raw. Material, in Process and Finished Merchandise on Hand and in Transit on basis of lower of cost or market value (Certified by Management) Other Assets Cash Surrender Value of Life Insurance Policies Officers' and Employees' Notes Receivable for Purchase of Common Stock--9,853 shares Common Stock purchased for resale to Employees--25,660 shares at cost Miscellaneous Notes, Accounts, Salesmen's Advances, etc. Permanent Land Buildings, Machinery and Equipment, etc. Less: Allowance for Depreciation Investment in California Mining Companies and Ore Lands Mining Companies--Fully Owned (Not operated during current year): Investment in and Advances to The California Zinc Company and Afterthought Zinc Mining Company Ore Lands, less allowance fpr depletion, etc. Good Will Patents, Trade Marks, Reorganization Expenses, etc. Prior PreferenceStock Purchased for Sinking Fund (79 shares at cost) Deferred Inventory of Advertising Stock, Stationery, Factory Supplies, Unexpired Insurance Premiums, Prepaid Taxes, Unamortiaed Discount, etc. $ 259,149.41 3,464,033.54 $ 3,723.182.95 139,298.07 $ 3,341,836.37 3,583,884.88 ' 162,268.93 ' 5,549,053.63 . $12,637,043-81 t $ 216,800.00 ' 211,457.79 198,610.51 . 129,447.87 756,316.17 $16,255,512.89 4,347,221.30 $ 2,229,125.41 11,908,291.59 14,137,417.00 $ 989,788.54 371,051.55 1,360,840.09 3,052,062.32 4,688.05 581,932.73 #32,530,300.17 The GUdden Company, Cleveland. December 2), 12)1. . Gentlemen!--We are aubmitang herewith consolidated balance abect of THE GLXDDEN COMPANY, CLEVELAND, and SUBSIDIARIES, excepting the California mining coopaniee, at of the dose of business October Jl, 1SJ1. The scope of our work included the examination of the records kept at Cleveland and of reports and other data on file in Cleveland pertaining to the asset! and liabilities of subsidiary companies and branches located elscwhci*. Cash ferula on deposit wen verified by direct correspondence with depositories, and recon cilement with the Company's records in Cleveland and with reports received from branches and subsidiaries. We inspected notes end acceptances receivable at Cleveland and examined lists sub 'i mitted by subiidiariei and branches in substantiation of like items included in their reports. Trial balances of customers' accounts receivable were submitted for our examination and the allowance for doubtful rotes, accounts, discounts, etc., in our opinion, it sufficient. At certsin of the subsi diaries end branches we also examined notes and acccpCaracas on hand and checked the trial balances of account, receivable with che individual ledger account,. Detailed inventory sheet, submitted for our inspection indicated that the merchandise inventory was based upon physical counts taken and priced under ths direction of the management. The entire inventory has been certified to US GUD002960 TED BAEAISTCE ELAND. AND SUBSIDIARIES [NESS. OCTOBER 31. 1931 SHEET Current LIABILITIES ' ' ' ' Accounts Payable for Purchases, Pay Rolls, etc. Accrued Taxes, Interest, Insurance, Royalties, etc. ^5 : . ; Bunded Debt Five-Year 5Gold Notes (due June 1, 1935) Issued Less: Held for Retirement First Mortgage 6/o Bonds Subsidiary Companies: Outstanding (33,000.00 due April 15, 1932} $ 6,000,000.00 314,000.00 Reserves For General Contingencies and Possible Loss on Purchase Commitments Nominal Capital Stock--Subsidiary Company Metals Refining Company 6% Cumulative Preferred: Issued 5,000 shares Less: Held in Treasury--645 shares $ 500,000.00 64,500.00 Capital Stock--The Glidden Company Prior Preference 7% Cumulative Authorized 75,000 shares Less: Unissued and Redeemed 6,000 shares $ 7,500,000.00 600,000.00 Common--Without Par Value Authorized 800,000 shares Outstanding 670,557 shares Stated Capital $5.00 per share $ 520,722.65 335,336.38 $ 5,686,000.00 250,000.00 $ 435,500.00 6,900,000.00 3,352,785.00 | 856,059.03 5,936,000.00 142,713.52 Surplus Capital Unearned Profit and Loss $10,681,684.97 1,351,644.60 2,873,913-05 14,907,242.62 ` '25,595,527.62 $32,530,300.17 (Note A) The Companies were reported as having letters of credit outstanding in the amount of $308,340.00 and were contingently liable for foreign drafts discounted amounting to $1,406.24, at October 31,1931. (Note B) In the preparation of this balance sheet, net assets located in Canada have been reduced to valuations based upon rate of exchange prevailing at date thereof, with exception of permanent assets which are included at valuation based upon par of exchange. (Note C) This balance sheet is subject to the comments in the "Certificate," Included in this report. by * responsible official of the Company as to quantities, salability and liasis c valuation, the letter as representing the lower of cost or market slues at October 31, 1931. Ve made test check* of the method of pricing and mathematical accuracy of computation*. The increase in the investment in California mining companies for the fiscal year, amounting to f4J>924.91( represents additional cash advances made by the parent Company. Provision has been made for all ascertained liabilities of the Companies at October 31 1931, Outstanding gold notes and first mortgage bonds payable were verified by direct correspondence with the trustees. The trustee of the issue of gold notes also reported that notes in the amount of *447,000.60 were retired December 7, 1931, which included gold notes held for retirement at October 31, 1931. Due to prior year's deductible losses, etc., no provision has been made through operations for federal income taxes. Subject to the foregoing, WE HEREBY CERTIFY, that in our opinion, based upon the records examined and information obtained by us, the accompanying balance sheet sets forth the financial position of THE GLIDDEN COMPANY, CLEVELAND, and SUBSIDIARIES, excepting the Cali fornia mining companies, as of the close of business October 31, 1931* Very truly youn, Errut k Ernst, O rtified Public Accountants . s GLD00298L CONDENSED CONSOLIDATED OPERATING STATEMEOT^ " - ------- - t-.vi i i :*..'tfri * . .. THE CUDDEN COMPANY--CLEVELAND, AND SUBSIDIARIES . .. Z'.. ' . i. - iJ; vVi For the Fiscal Year Ended October 31,19J1 1r.V.tS i '-.CO-/. i- - `V '.A Net Sales (Excluding inter-company and subsidiary sales and transfers) $28,505,172.66 Profit Before Interest, 'Depreciation and Other Deductions Other Deductions--Net ` $1,365,219.22 214,901.47 Profit Before Interest and Depreciation Interest on Funded Debt 1,150,317.75 342,161.20 Profit Before Providing for Depreciation Provision for Depredation 808,156.55 606,776.21 Net Profit 201,380.34 (Note A) In the preparation of the above condensed consolidated operating statement, net earnings of Canadian subsidiary have been reduced to the basis of exchange rate prevailing at the end of the period. CONSOLIDATED SURPLUS ACCOUNT THE GUDDEN COMPANY-CLEVELAND, AND SUBSIDIARIES Balance October 31, 1930--as shown by Audit Report Deductions Dividends paid: Subsidiary Company--Preferred The Glidden Company: Prior Preference--7% $15,420,565.66 $ 29,130.00 506,138.50 $ 535,268.50 Net Excess of Cost Over Declared or Par Value of Capital Stock of the Parent Company Retired Provision to Reduce Net Assets, Exclusive of Permanent Accounts, Located in Canada to Prevailing Rate of Exchange at October 31, 1931 Additions Net Profit from Operations for the Fiscal Year Ended October 31, 1931 Discount on 5J4% Gold Notes Purchased for Retirement Discount on Subsidiary Company Preferred Stock Purchased Balance October 31, 1931 176,419.11 53,989.57 $ 765,677.18 . $ 201,380.34 34,962.50 16,011.30 v :: . , 252,354.14 ; /.: y y y ... . . ,513,32*64 - ; Y 414,907.242.62: ' V > ; * ~ :-( *:<." :,,v.. J- * .-? [ GLD002982 ;' ;