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FILE NAM E: ICI (ICI) DATE: 1970 DOC#: ICI044 DOCUMENT DESCRIPTION: Excerpt - Annual Report Highlights (All amounts In thousands except data per share and number of shareowners) Sales and Other R e v e n u e s .............................. Earnings from Consolidated O p e ra tio n s ......... Equity in Earnings of 50%-Owned Companies . Net Earnings .................................................... Earnings per Share of Common S t o c k ............. 1970 $155,216 4,749 1,550 6,299 1.54 Additions to Land, Buildings and Equipment .. Shareowners' Investm ent................................. Number of Shareowners, December 31 ......... Average Shares of Common Stock Outstanding Dividends per Common S h a r e ........................ 11,372 73,798 14,062 4,090 1.00 1969 $144,773 4,838 1,753 6,591 1.61 6,626 71,853 13,696 4,092 .95 Atlas Chemical Industries, Inc. 1970 Annual Report CONTENTS f President's Letter ....................................................................................... 1 Financial Review ....................................................................................... 2-4 Profit Center Trends .................................................................................. 5-6 Stuart Pharmaceuticals-- A Decade of P r o g r e s s ....................................... 7-9 Financial Statements ...................................................................................10-14 Accountants' R e p o rt.................................................................................... 15 Principles of Statement P rese n ta tio n ......................................................... 16 Five-Year Comparative R e c o r d ................................................................... 17 Facilities .................................................................................................... 18 Products, M a r k e ts ....................................................................................... 19 Directors, Officers, Annual M e e tin g ........................................................... 20 To Our Shareowners Your Com pany did well in 1970 despite the re cession in the dom estic economy. Consolidated sales and other revenues were 7 percent above 1969 and set a new high for the thirteenth con secutive year. , Consolidated net earnings for the year were 4 percent below the record level of 1969. In the first six months, earnings set a new high for the period. However, they were sharply lower in the second half, owing to the recession's adverse effect on chem icals business and cutbacks in defense programs. Offsetting the declines were strong performances by the Stuart Pharmaceu ticals and International profit centers. Capital expenditures totaled $11.4 million in 1970, up from $6.6 m illion in 1969. Most signifi cant were outlays for the new Stuart Pharma ceuticals facility near Newark, Delaware. Strikes delayed construction, but startup is expected by mid-1971. In 1970 we formed a Pollution Control Ven ture Department to define opportunities for Atlas in the pollution abatement field. In the wastewater treatment field we have an oppor tunity available to few with our new a t l a s e p flocculants, useful in settling suspended solids, and our d a r c o activated carbons which remove dissolved organic matter. This combination gives us a favorable starting position in an emerging growth industry. The flocculants are now in production in a pilot plant completed in the fourth quarter. This year marks the tenth anniversary of our merger with The Stuart Com pany and our en trance into the ethical pharmaceuticals busi ness. Stuart's progress since the merger is re viewed elsewhere in this Report. In sum, Stuart has grown at twice the rate of the ethical drug industry over the past decade. Sales have more than trebled and profits have increased more than fourfold. This growth we attribute to strength ened sales and market research organizations, an improved product mix, and provision of nec essary support facilities. In addition, a m edical research capability has been established to serve as a source of completely new products. A s noted on page 5, Stuart's considerable growth has brought about an appreciable shift in the proportionate contributions of our four profit centers to Com pany earnings. In 1971 we expect continuing improvement in the Stuart Pharmaceuticals and International contributions to earnings. However, we also anticipate a sharp drop in earnings from the combined Explosives / Aerospace / Ordnance business. The extent to which Chem icals profits recover will depend on the vigor of a resurging domestic economy. Therefore, for the year as a whole our earnings outlook is uncertain. In the first half of the year we do not expect to reach the record levels of the first two quarters of 1970. On the other hand, the last half should exceed the like period in 1970. For the first time in seventeen years a fam iliar signature is missing from this letter. After almost forty-four years of distinguished service to Atlas, Ralph K. Gottshall retired at the beginning of the year in accordance with the Com pany's pension plan. His foresight and leadership during twenty years as a corporate officer played a vital role in transform ing Atlas into a soundly diversified, growth oriented international Company. March 24,1971 ATLAS CHEMICAL. INDUSTRIES, inc Five-Year Comparative Record (All dollar amounts in thousands except data par share) EARNINGS RESULTS FOR YEAR S a le s and Other Revenues ........................................ . . . $ Equity in Earnings of 50%-Owned Com panies (a) S o lar Nitrogen Chem icals, Inc. Leasing ................................................................' . . . $ Operating ............................................................. . . . $ Total Solar Nitrogen Chem icals, Inc................ .. .$ Total International Affiliates .................................. . . . $ Total Equity in Earnings of 50%-Owned Com panies $ Earnings from Consolidated O p e r a tio n s ................... . . . $ Net Earnings (b) ......................................................... . . . $ Earnings per Share of Common Stock Equity in Earnings of 50%-Owned Companies . . . . . . . $ Earnings from Consolidated O p e r a tio n s ............... . . . $ Net Earnings (b) ...................................................... .. .$ Net Earnings Excluding Equity in Solar Operations .. .$ FINANCIAL CONDITION W orking C a p it a l......................................................... . . . $ Current Ratio ............................................................... Long-Term Debt ......................................................... . . . $ Net Debt to Total Net Debt and E q u it y ..................... LAND, BUILDINGS AND EQUIPMENT Total Value at Cost, Decem ber 31 ........................... Accumulated Depreciation and Amortization December 31 ......................................................... Net Book Value, December 31 ................................ Additions During Year .............................................. Depreciation and Am ortization for the Y e a r ........... ...$ .. .$ .. .$ ...$ o w n er sh ip Shareow ners' Investment, Decem ber 31 ................. . . . $ Average Shares of Common Stock O u tsta n d in g ........ (000) Book Value per Average Common S h a r e ................. . . . $ D ividends Paid During Y e a r ...................................... . . . $ Dividends Paid During Year per Common Share . . . .. .$ Net Earnings Distributed as D iv id e n d s ..................... Earnings Retained in the B u s in e s s ........................... . . . $ Number of Shareowners, Decem ber 31 ................... Market Price per Common Share High ......................................................................... . . . . $ Low ........................................................................ . . . . $ F m p i o v f f s OF P A R E N T r n m iP A K Y Number, December 31 .............................................. Wages, Salaries and Other Employment Costs . . . . . $ 1970 155,216 235 235 1,315 1,550 4,749 6,299 .38 1.16 1.54 1.54 31,288 1.98 24,470 31.0% 124,524 65,765 58,759 11,372 6,016 73,798 4,090 18.04 4,091 1.00 64.9% 2,208 14,062 25 Vs 18 Vi 5,012 52,038 1969 144,773 316 316 1,437 1,753 4,838 6,591 .43 1.18 1.61 1.61 38,546 2.77 30,212 28.5% 114,420 60,767 53,653 6,626 5,957 71,853 4,092 17.56 3,892 .95 59.1% 2,699 13,696 31% 19V4 5,275 49,891 1968 134,573 105 (264) (159) 1,370 1,211 4,328 5,539 .30 1.07 1.37 1.43 35,883 2.78 34,811 29.0% 109,744 56,417 53,327 5,451 5,903 68,323 4,048 16.88 3,238 .80 58.5% 2,301 15,111 26% 161/4 5,313 47,251 1967 120,050 (215) (215) 922 707 3,943 4,650 .18 .97 1.15 1.20 27,796 2.30 25,421 35.0% 106,204 51,838 54,366 8,778 5,671 65,948 4,047 16.30 3,238 .80 69.6% 1,412 15,974 23% 16 5,374 43,508 1966 115,184 319 319 447 766 5,073 5,839 .19 1.26 1.45 1.37 30,165 3.00 23,156 28.3% 99,077 47,264 51,813 12,617 5,130 64,533 4,037 15.99 3,224 .80 55.2% 4,053 16,640 25 Vi 14% 5,018 40,080 (a) 1968 includes the equity in Solar Nitrogen Chemicals, Inc.'s operating results through June 30, leasing Income for the period July to December due to the change in the conduct of Solar's business effective July 1. (b) 1966 net earnings excludes $1,438,000 of nonrecur ring net gain on sale of a portion of Giant plant real estate, less income taxes, equivalent to $.35 per common share. 17 FACILITIES (Atlas Ownership) WESTERN HEMISPHERE UNITED STATES Anaheim, CA: Aerospace Sales Office Atlanta, GA: Stuart Pharmaceuticals Sales Office Chicago, 1L: C he m icals and Stuart Pharmaceuticals Sales Offices Joplin, MO: Explosives Sales Office; Industrial Explosives and Nitrogen Chem icals Plant Kansas City, KS: Stuart Pharm aceuticals Sales Office Knoxville, TN: Explosives Sales Office Marshall, TX: Activated Carbon Plant; Darco Experimental Laboratory Memphis, TN: Food Emulsifiers Plant Newark, DE: Stuart Pharm aceuticals Plant and Distribution Center New Castle, DE: A T L A S E P Pilot Plant; Chemical Engineering Laboratories; Organic Chem icals Plant New York, NY: Chem icals and Stuart Pharmaceuticals Sales Offices Pasadena, CA: Headquarters, Stuart Pharmaceuticals Division, Sales Office, Laboratory, Plant and Distribution Center San Mateo, CA: Explosives Sales Office Tamaqua, PA: Industrial Explosivesand Blasting Supplies Plants; Explosives Laboratory, Aerospace Plant Valley Forge, PA: Headquarters, Aerospace Components Division, Sales Office, Laboratories and Plant Wilmington, DE: Corporate General Office; Headquarters, Sales Offices, Chemicals, Explosives and International Divisions; Bio-Medical Research Laboratories, Chemical Research and Development Laboratories CANADA Atlas Chemical Industries, Canada, Ltd. (70%) Brantford, Ont.: Sales Office, Chem icals Plant Montreal, Que.: Sales Office Vancouver, B. C.: Sales Office LATIN AMERICA Brazil; Atlas do Brasil Produtos Qumicos Ltda. (100%) Rio de Janeiro: Sales Office Sao Paulo: S a le s Office Mexico: Atlas de Mexico, S.A. (100%) Mexico, D.F.: Sales Office San Miguel: Industrial Explosives Plant Canamex, S.A. (40%): (Sales by Atlas de Mexico, S.A.) Puebla: Chem icals Plant Nicaragua: Industrias Quimicas Atlas de Centroamerica S.A. (75%) Leon: Sales Office, Chem icals Plant Managua: Sales Office U.S.A.: Atlas Chemical Interamerica, Inc. (100%) Coral Gables, FL: Headquarters, Latin-American Operations EASTERN HEMISPHERE EUROPE B e lg iu m : Atlas Chemical Industries S.A. (100%) Brussels: Management, Technical & Marketing Services Chemurgie, G. m. b. H. (50% by Atlas Chemie) Brussels: Sales Office England: Honeywilt-Atlas Ltd. (50%) Carshalton: Sales Office, Laboratory, Chem icals Plant Bibby Chemicals Ltd. (10%) Liverpool: Sales Office, Laboratory, Chem icals Plant France: Atlas Chemical France S. A. R. L. (100%) Paris: Sales Office Germany: Atlas Chemie G. m. b. H. (100%) Essen: Sales Office, Laboratory, Chem icals Plant Italy: Atlas Europol S. p. A. (100%) Ternate: Sales Office. Laboratory, Chemicals Plant Societ Milanese Industrie Chimiche S. p. A. (50% by Atlas Europol) Varallo Pombia: Sales Office, Chem icals Plant Spain: Sinor-Kao, S. A. (5%) Barcelona: Sales Office, Laboratory, Chem icals Plant INDIA Indian Detonators Ltd. (50%) Bombay, Maharashtra: Sates Office Calcutta, West Bengal: Sales Office Hyderabad, Andhra Pradesh: Sales Office, Laboratory, Blasting Supplies Plant New Delhi: Sales Office Rourkela, Orissa: Sales Office, Industrial Explosives Plant The Mysore Industrial and Testing Laboratory Ltd. (66% by Indian Detonators Ltd.) Bangalore: Sales Office, Laboratory, Pharmaceuticals Plant FAR EAST Japan: Kao-Atlas Company, Ltd. (49%) Osaka: Sales Office Tokyo: Sales Office, LaboratoiY Wakayama: Laboratory, Chem icals Plant Singapore: Atlas Chemical International, Inc. (100%) Singapore: Sales Office Taiwan: Atlas Taiwan Corporation (51 %) Kaohsiung: Industrial Explosives Plant Taipei: Sales Office AUSTRALASIA Australia: imperial Atlas Ltd. (50%) Melbourne: Headquarters, Sales Office PRINCIPAL PRODUCTS_____ ETHICAL PHARMACEUTICALS Anfianginal agents (SORBITRATE: oral. sublingual, chewable) Anti-Caries preparations (MULVIDREN-F. CARI-TAB) Antinauseant (BUCLADIN) Gastrointestinal preparations ( m y l a n t a , MYLICON, NORMACID,KINESEO} Hematinics (STUARTINIC NEOTINIC. FERANCEE) Laxatives (DIALOSE, DIALOSE PLUS. EFFERSYLUUM) Urinary tract infection therapy (SULADYNE) Vitaminand mineral products (STUART f o r m u l a , MULVIDREN. STUART PRENATAL, STUARTNATAL 1+ 1. OREXIN. MUCOPLEX, PROBEC. PROBEC T) C H EM IC A LS Polyols Sorbitol (SORBO, ARLEX) Mannitol Industrial polyols (SUTRO) Surfactants Sorbitan fatty acid esters (SPAN) Alkoxylated sorbitan and sorbitol fatty acid esters (TWEEN, AENEX) Alkoxylated adducts (BRU. m y r j) Mono- and diglycerides ( a t m u l . ATMOS. ARLACEL) Blends (TANDEM, TWEEN-MOS. ATLOX, ATPET. ATPLUS, MILSI2E. MILSOFT, MILSTAT, MILUBE) Polymers and Components Unsaturated bisphenol-fumarate polyester resins (ATLAC) Sorbitol polyethers (ATPOL) Purification Chemicals Activated Carbon (DARCO) MARKETS, Typical Product Uses ADHESIVES Polyols for plasticizing animal glues. Plasticizers for polyvinyl acetate adhesives. AEROSPACE Explosive-actuated, electro-mechanical devices. AGRICULTURE Emulsifiers for pesticide emulsifiable concentrates. Wetting agents for pesticide formulations. Adjuvants for herbicide formulations. BAKERY PRODUCTS Emulsifiers and conditioners for improved processing, retarding staling in bread, rolls, ` doughnuts, and better volume and baking control in cakes. BEER Activated carbon for removal of chill haze precursors during brewing process. BEVERAGES, ALCOHOLIC Activated carbon for wine clarification and removal of undesirable oils from whiskey. (See also "Beer" ) BEVERAGES, NON-ALCOHOLIC Sorbitol for added body, pleasant mouthfeel, and improved taste in dietetic drinks. Activated carbon for removal of undesirable tastes and odors from water supplies. CANDY Sorbitol for longer shelf life of grained confections. Sorbitol and mannitol for dietetic candies and sugarless chewing gums. Emulsifiers for improving caramel chewing qualities, retarding loss of gloss, and improving p a y a b ility of fat-based cocoa products. CHEMICAL PROCESSING Activated carbon for removal of impurities. Sorbitol for manufacture of surfactants, alkyds, and polyethers. CLEANING COMPOUNDS Emulsifiers, wetting agents, and detergents lor laundry and dishwashing compounds, textile scouring, metal cleaning and degreasing. COAL MINING Explosives and blasting supplies. CONSTRUCTION Explosives and blasting supplies. Urethane foam components for insulation, panelling, etc. Polyester resins for fiber-reinforced corrosion-resistant equipment. Asphalt and concrete additives. COSMETICS Sorbitol as humectant in toothpaste and for emollience and moisture-conditioning in creams and lotions. Surfactants for creams, lotions, hair preparations, shampoos, toothpaste, antiperspirants, and gels. Solubilizers for perfume oils. DAIRY PRODUCTS Surfactants for imparting dryness and promoting aeration in frozen desserts and whipped toppings. Emulsifiers for imitation m ilk and coffee whiteners. DRUG MANUFACTURING Nitrate mixtures for treatment of angina pectoris. Activated carbon for purification of vitamins, antibiotics, and other drugs. (See also "Pharmaceutical Formulation" ) DRY CLEANING Activated carbon for solvent purification. Detergents for removal of water-soluble soils. ELECTRONICS Glass-to-metal seals for smalt, intricate, electrical connections in computers, transformers, electronic communications devices, etc. E LE C T R O PLA T IN G Activated carbon for removal of impurities from electroplating baths. FATS AND OILS Activated carbon tor decolorization and deodorization. Emulsifiers for shortenings and margarine. FOODS Emulsifiers and polyols for processed foods. (See also "Bakery Products", "Beverages", "B eer", "Candy" , "Dairy Products'1, "Fats and Oils" , "Foods, Dietetic" , and "Sugar Refining") FOODS, DIETETIC Sorbitol and mannitol to give added body, p a y a b ility , and taste. F U R N IT U R E Polyethers and systems lor high and low density urethane moldings. GEOPHYSICAL PROSPECTING Explosives and blasting supplies. GLASS Polyester binder resins for glass-fiber mat. GLUE SPECIALTIES (See "Adhesives" , "Printing Trades") HEALTH CARE Ethical pharmaceuticals. INSECTICIDES AND HERBICIDES (See "Agriculture") MINING Explosives and blasting supplies. P A IN T Sorbitol for synthesis of alkyds. Emulsifiers for pigment dispersion, emulsion polymerization and thixotropic effects. PETROLEUM Corrosion inhibitors. INDUSTRIAL EXPLOSIVES High Explosives and Blasting Agents Nitroglycerin and ammonia dynamites (AMMODYTE) Gelatins and semi-gelatins (GIANT, GELODYN) Permissible explosives (COALITE) Seismic gelatins (PETROGEL) Ammonium nitrate-fuel oil (ANFO) blends (PELLITE, GIANITE) Slurries ( a q u a n a l , a q u a r a m ) Blasting Supplies Instantaneous electric blasting caps Delay electric blasting caps (ROCKMASTER, TIMEMASTER, KOLMASTER) Seismic blasting caps (STATlCMASTER) AEROSPACE COMPONENTS Actuators Cutters Detonators Drogue guns Electric matches Glass-to-Metal Igniters Primers Squibs Switches seals Emulsifiers for cutting oils, hydraulic fluid emulsions. Detergent additives for gasoline. PHARMACEUTICAL FORMULATION Emulsifiers tor creams, lotions and ointments. Soluhilizers for vitamins, flavor and perfume oils. Sorbitol solution as vehicle for liquid oral preparations and moisturizer for creams, lotions, and ointments. Mannitol as base for chewable tablets and excipient for moisture sensitive drugs. PLASTICS Unsaturated polyester resins for fiberreinforced corrosion-resistant and fire retardant equipment. Rigid urethane foam components. Plasticizers, lubricants, anti-fog. and antistatic agents far production of plastic products. Surfactants for polymerization. PRINTING TRADES Polyols to prevent prehardening of ink and dye pastes, and to plasticize animal glues and printers' rollers. Surfactants for pigment dispersion. Q U A R R Y IN G Explosives and blasting supplies. REFRIGERATION Polyethers and systems for rigid urethane foams for insulation of cold storage equipment and transport. RUBBER Activated carbon in white-wall tires to prevent staining from exudation. Surfactants for processing of tire cord. SUGAR REFINING Activated carbon for removal of color and other impurities from cane, cam, and beet sugars. TEXTILE PROCESSING Surfactants for scouring, wetting, lubrication, softening, static prevention, dye leveling and retarding, and pigment dispersion. Emulsifiers for waxes, oils, and other additives. Formulated antistatic lubricants and detergents. TEXTILE, SYNTHETIC FIBER PRODUCTION Surfactant additives for viscose solutions and rayon spin baths. Surfactants for formulation of producer finishes, antistats, softeners and lubricants. Activated carbon for purification of nylon salts. TOBACCO Sorbitol solution as plasticizer and humectant. TOOTHPASTE (See "Cosmetics") WATER PURIFICATION Activated carbon to remove tastes and odors from water supplies and for treatment of industrial wastewater.