Document ymkgND0Xx7xz6Rk7M7v4Db7ND

CT-260 ANNUAL GBii&ig&ea REPORT CTD035903 ASPHALT ROLL ROOFING ASPHALT SHINGLES AND SIDINGS ASBESTOS SHINGLES AND SIDINGS GYPSUM PLASTERS "FIRESTOP" GYPSUM WALLBOARD GYPSUM WALLBOARD AND LATH GYPSUM SHEATHING GYPSUM ROOF DECKS FIBER WALLBOARD BUILDING INSULATION ROOF INSULATION BOARD ACOUSTICAL TILE LIME CTD035904 Certain-teed Products Corporation: Your Company's consolidated financial statements for the year 1951 are submitted herewith. Sales and Earnings: Net sales in 1951 were $62,507,590, the largest in the history of the Company, compared with $55,951,908 in 1950. However, due to sharply advancing prices of materials, as well as increases in labor costs, profit per centages decreased. An increase in the rate of Federal taxation in the year 1951 over the year 1950 resulted in an increase of approximately $700,000 in the tax pro vision for 1951 over the amount that would have been required based upon 1950 rates. The Company's excess profits tax provision in 1951 is equal to approximately 1% of the total provision for taxes. Net earnings amounted to $5,060,153, equal to $3.11 per share of Common stock compared with $6,380,009 and $3.91 in 1950. Working Capital: The working capital at December 31, 1951 was $13,908,762 compared with $10,535,536 at December 31, 1950. The ratio of current assets to current liabil ities at December 31, 1951 was approximately five to one. During the year 1951 the Company borrowed $5,000,000, represented by 3% promissory notes. An amount of $1,750,000 of the net proceeds has been ap- CTD035905 3 propriated, and so designated in the balance sheet, for the purpose of completing the construction program now under way. The balance of the net proceeds has been added to working capital to reimburse the Com pany for capital expenditures. Retained Earnings: The retained earnings at December 31,1951 amount ed to $25,044,685 compared with $21,608,411 at De cember 31, 1950. New Properties, Additions and Replacements: There is under construction at Pryor, Oklahoma, a plant for the manufacture of gypsum board papers, for which a Certificate of Necessity was granted by the Government. Due to delays in securing certain equip ment and machinery, the completion of this plant is not expected before the late summer of 1952. These delays in delivery of materials from our suppliers were due to strikes in their plants and to Governmental re strictions on certain materials. Construction of a research and testing laboratory at Paoli, Pennsylvania was commenced during 1951 and it is expected that these premises will be occu pied in April, 1952. Heretofore, this phase of the busi ness has been conducted in leased premises and it is believed by the Management that these more extensive facilities, with better working conditions for our engi neering, laboratory and research staffs, will substan tially contribute to the improvement of the Company's products and the development of new products. There is also under construction a major addition to 4 CTD035906 warehouse facilities at the Kansas City, Missouri roofing plant. During 1951, a fire of unknown origin destroyed a portion of the felt manufacturing facilities at the Marseilles, Illinois roofing plant. The replacement cost of the destroyed property was covered by insurance and is fully recoverable. Roofing operations are continuing at that plant and it is being supplied with the necessary felt from other sources. Replacement of the lost produc tive capacity is contemplated in 1952. New Products: The Company perfected and introduced during 1951, "Firestop" Gypsum Wallboard. This exclusive gypsum product, with a much higher fire resistance rating than regular gypsum wallboards, has met a wide and constantly increasing acceptance by architects, contractors, and public officials. Dividends: During the year 1951 the Company declared and paid regular quarterly dividends of 25c per share on its Common Stock. Stockholders were advised on December 20, 1951, that in view of the reduction in volume of incoming orders as well as price reductions in certain products, the declaration of an extra dividend was not deemed advisable at that time. Future Prospects: The outlook for volume of business in 1952 does not appear as promising as in 1951. The first few months of the year are expected to show a sharp decline in sales compared with the same period in 1951. The Manage CTD035907 5 ment believes that second and third quarter business in 1952 will show an improvement over the first quarter, although we expect, due to Governmental controls and difficulty in securing certain materials, that the over all volume of building will be less in 1952 than in 1951 and that consequently sales may be expected to be somewhat less than they were in the record year of 1951. Every effort will be made to secure the great est possible percentage of total business available. The Company's facilities are in very good condition. Its manufacturing capacity is the largest in its history. This capacity, if converted into dollar sales at present existing prices, is substantially in excess of the record sales of 1951. Management and Personnel: Mr. W. W. F. Shepherd, Chairman of the Board of Turner & Newall Limited, was elected a director in 1951. Mr. Shepherd brings to your Company broad experience as well as a knowledge of the manufacture of building products. The Board of Directors and the Management wish to express thanks to the Company's many loyal and able employees, as well as to the stockholders, whose co operation and support have appreciably contributed to the results achieved in 1951. Respectfully submitted, Ardmore, Pennsylvania February 25, 1952 6 Chairman of the Board CTD035908 Certain-teed PRODUCTS CORPORATION and subsidiary companies COMPARATIVE CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS Year Ended December 31 1951 1950 Net sales.................................................................. Profit on contract processing................................ $62,507,590 374,038 $55,951,908 355,187 62,881,628 56,307,095 Cost of goods sold.................................................. 48,802,953 42,130,141 Selling, general and administrative expenses. .. 4,333,166 3,952,990 53,136,119 46,083,131 9,745,509 10,223,964 Other income (less other deductions of $308,432 in 1951 and $57,003 in 1950)............................ 354,674 1,059,464 Provision for Federal and Canadian taxes on income.................................................................. 10,100,183 5,040,030 11,283,428 4,903,419 Net income.............................................................. 5,060,153 6,380,009 Retained earnings at December 31, 1950-1949 (from October 1,1944)...................................... Reserve for contingencies restored to retained earnings................................................................ Dividends paid: 4}4% Cumulative Prior Preference Stock.... Common Stock.................................................... Premium and expenses on redemption and retire ment of preference stock................................. Retained earnings at December 31, 1951-1950 (from October 1, 1944)...................................... 21,608,411 26,668,564 1,623,879 1,623,879 25,044,685 $25,044,685 16,228,403 1,551,155 24,159,567 20,700 2,435,268 2,455,968 21,703,599 95,188 $21,608,411 Total depreciation and depletion charges amounted to $1,221,502 in 1951 and $1,036,262 in 1950, the latter amount being reclassified for comparative purposes. The accompanying Notes to Consolidated Financial Statements are an integral part of this statement ana should be read in conjunction herewith. CTD035909 7 Certain-teed PRODUCTS CORPORATION and subsidiary companies CONSOLIDATED Current Assets: Cash.................................................................. United States Government securities, at cost, which approximates quoted market, plus accrued interest.................................. Accounts and notes receivable (less es timated uncollectibles of $208,626).......... Inventories at the lower of cost or market, cost being determined on the Lifo basis as to certain raw materials: Raw materials and supplies.................. Finished goods and work in process... Total current assets........................ Investments: United States Government securities, at cost, which approximates quoted market, plus accrued interest (appropriated for construction program)............................... Other investments (at cost or less).............. Deferred Charges and Other Assets........ Property, Plant and Equipment (at cost, less reduction in 1939 to appraised values): Land and mineral deposits (less deple tion of $170,207)................................ Buildings and equipment (less depreci ation of $13,516,698).......................... Construction in progress........................ Intangible Assets (at nominal values)........... $ 2,968,551 1,893,319 - 1,750,000 256,412 923,581 17,133,284 3,567,031 $ 6,636,927 1,171,806 4,320,421 4,861,870 16,991,024 2,006,412 1,012,107 CTD035910 21,623,896 5 $41,633,444 The accompanying Notes to Consolidated Financial Statements are an 8 BALANCE SHEET AT DECEMBER 31, 19S1 Current Liabilities: Accounts payable and accrued expenses... Accrued taxes: Federal and Canadian taxes on income (less $4,563,830 United States Treasury Savings Notes, at cost, plus accrued interest).......................................... . Other............................................................ Total current liabilities.................. 3% Promissory Notes (due in annual install ments of $325,000 commencing April 1, 1953 with final payment of $775,000 due April 1,1966)--Note 2.................................. Reserve for Product Guarantees $ 294,036 477,972 $ 2,310,254 772,008 3,082,262 6,000,000 136,898 Stockholders' Equity--Notes 2 and S: Capital: Capital assigned to shares: Cumulative Prior Preference Stock, $100.00 par value, authorized and unissued 50,000 shares Common Stock, $1.00 par value, authorized 2,000,000 shares, issued and outstanding 1,623,879 shares................ Capital in excess of par value.................. Retained earnings (from October 1,1944).. 1,623,879 6,745,720 8,369,599 25,044,685 CTD035911 33,414,284 $41,633,444 integral part of this statement and should be read in conjunction herewith. 9 deb TO CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 1951 NOTE j Foreign Subsidiary Companies (Consolidated) : Net assets of the Canadian subsidiary companies included in the accompany ing financial statements aggregate $2,347,142, of which $892,549 represents net current assets. The investment in Canada is not subject to exchange restrictions at the present time. The consolidated net income of $5,060,153 includes net income of $698,072 of the Canadian subsidiary companies. NOTE 2 3% Promissory Notes: The 3% promissory notes, issued during the year in accordance with the terms of a loan agreement dated April 27, 1951, contain certain restrictions relating, among other things, to the right of the Company to purchase any of its capital stock or to declare dividends (other than stock dividends). Accordingly, at December 31,1951, unrestricted retained earnings avail able for such purposes approximated $5,400,000. NOTE ^ Stockholders' Equity: Pursuant to an incentive plan, options to purchase 45,600 shares of the Company's Common Stock (granted to officers and key employees) were outstanding at December 31, 1951 at option prices of $13.90 a share for 37,900 shares, $14.14 a share for 7,550 shares (granted June 22, 1951) and $13.75 a share for 150 shares. During the year, 50 shares were issued under the plan resulting in an increase of $853 in capital in excess of par value. NOTE Jfr Contingencies and Other Comments: An anti-trust suit to which the Company was a party, involving the Com pany's activities in the gypsum industry, was settled during the year without any material effect on the financial condition or operations of the Company. The accompanying consolidated financial statements are subject to final determination of Federal, Canadian, state and local taxes. Reference is made to the Annual Report for the year ended December 31, 1950 for notes pertaining to the consolidated statement of income and retained earnings for the year then ended. 10 CTD035912 S^cccumta/rUb ' 0leAowt S. D. LEIDESDORF & CO. CERTIFIED PUBLIC ACCOUNTANTS NEW YORK, N. Y. To the Board of Directors Certain-teed Products Corporation Ardmore, Pennsylvania We have examined the consolidated balance sheet of Certain-teed Products Corporation and subsidiary companies as at December 31, 1951 and the related consolidated statement of income and retained earnings for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accord ingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circum stances. In our opinion, the accompanying consolidated balance sheet and consolidated statement of income and retained earnings, together with the notes to consolidated financial statements, present fairly the consolidated financial position of Certain-teed Products Cor poration and subsidiary companies at December 31, 1951, and the consolidated results of their operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. New York, N. Y. February 13,1952 S. D. Leidesdorf & Co. CTD035913 Certain-teed PRODUCTS CORPORATION and subsidiary companies Current Assets........................................................ U. S. Government Securities at cost (appro-1 priated for construction program)................... Investment in Capital Stock and Mortgage Notes of Subsidiary Companies, not consoli dated in 1947...................................................... Property, Plant and Equipment (less deprecia tion and depletion)............................................. Other Investments, Deferred Charges and Mis cellaneous Assets................................................. Total................................................................. 1951 $16,991,024 1,760,000 -- 21,623,896 1,268,524 $41,633,444 1950 $16,042,634 18,679,229 904,478 $35,626,341 Current Liabilities.................................................. Reserves................................................................... 3>% Debentures................................................... 3% Notes................................................................. Capital Assigned to Shares................................... Capital in Excess of Par Value............................ Retained Earnings (from October 1, 1944)........ Total................................................................. Working Capital..................................................... Cash and Government Securities......................... 12 $ 8,082,262 136,898 -- 5,000,000 1,623,879 6,745,720 25,044,685 $41,633,444 $13,908,762 $ 9,658,733 $ 5,507,098 142,136 1,623,829 6,744,867 21,608,411 $35,626,341 $10,535,636 $ 6,793,044 CTD035914 AT A G L A N C E AT DE CEMBER 3 1 1949 $12,605,532 1948 $15,793,418 1947 $13,417,788 1946 $11,886,300 2,500,000 500,000 1,000,000 -- 1945 $ 9,633,386 -- -- 14,682,109 823,862 $30,611,503 -- 14,086,695 756,849 $31,136,962 1,300,000 10,601,868 575,089 $26,894,745 -- -- 9,037,401 6,987,684 821,752 . $21,745,453 556,176 $17,177,246 $ 2,519,896 1,690,960 -- $ 2,910,021 1,697,359 3,100,000 $ 3,328,595 1,703,908 3,325,000 $ 3,060,504 1,000,232 3,550,000 $ 2,151,350 616,909 3,775,000 3,462,740 6,709,505 16,228,402 $30,611,503 $10,085,636 $ 8,599,626 3,471,729 6,709,505 13,248,348 $31,136,962 $12,883,397 $ 8,447,257 3,120,699 6,688,912 8,727,631 $26,894,745 $10,089,193 $ 6,015,030 3,121,899 7,152,220 3,860,598 $21,745,453 3,291,299 6,531,669 811,019 $17,177,246 $ 8,825,796 $ 7,482,036 $ 5,228,065 $ 6,407,590 CTD035915 13 120 East Lancaster Avenue Ardmore, Pennsylvania Ardmore, Pennsylvania Detroit, Michigan Niagara Falls, New York Atlanta, Georgia East St. Loins, Illinois Richmond, California Chicago, Illinois Kansas City, Missouri Salt Lake City, Utah Cleveland, Ohio New York, N. Y. (export sales) Minneapolis, Minnesota Dallas, Texas Thorold, Ontario, Canada East St. Louis, Illinois Kansas City, Missouri York, Pennsylvania Roofing Marseilles, Illinois Niagara Falls, New York Richmond, California Savannah, Georgia Dallas, Texas Fort Dodge, Iowa Grand Rapids, Michigan Blue Rapids, Kansas Gypsum Acme, Texas Akron, New York Sigurd, Utah Paper Pryor, Oklahoma Fiberboard Buffalo, New York Fiberboard, Boxboard and Newsprint Thorold, Ontario, Canada use and recommend Certain-teed BUILDING products CTD035916 CERTAIN-TEED PRODUCTS CORPORATION Rawson G. Lizars. Chairman Ralph A. Bard Herbert W. Hirsh Henry W. Breyer, Jr. C. Kenneth Hobson Thomas F. Brown John Valentine Lizars H. B. Campbell Hamilton Pell Albert J. Hettinger, Jr. W. W. F. Shepherd S&ecu&ve ^ioonvnufitee Thomas F. Brown, Chairman Rawson G. Lizars Hamilton Pell Henry W. Breyer, Jr. Rawson G. Lizars........ John Valentine Lizars C. Kenneth Hobson ... Paul E. Fischer........... Andrew R. Craven___ John R. Johnston........ Arthur 0. Graves........ Mellor Hargreaves . . ............Chairman of the Board and President ...................................................Vice President ................................................... Vice President ...................................................Vice President .................................. Assistant Vice President ......................................................... Comptroller ............................................................. Secretary ........................................................... Treasurer Bankers Trust Company, New York The New York Trust Company, New York Clausen, Hirsh & Miller, Chicago S. D. Leidesdorf & Co., New York CTD035917 15 J ANNUAL Gufjffiggttt REPORT CTD035918 quality made Certain SATISFACTION GUARAN - teed CTD035919