GYPSUM COMPANY. Forty-seventh Annual Report Fiscal Year Ended December 31, 1948

Transcription

1 GYPSUM COMPANY Forty-seventh Annual Report Fiscal Year Ended December 31, 1948

2 United States Gypsum Company (AN ILLINOIS CORPORATION) S is Forty-seventh Annual Report Fiscal Year Ended December 31, 1948

3 February 11, To the Stockholders of the United States Gypsum Company: Net earnings of United States Gypsum Company and subsidiaries for the year 1948 were $24,596,688, equivalent to $15.04 per share on the outstanding common stock, after deducting dividends paid on the 7% preferred stock. The comparable net earnings for the year 1947 were $16,531,744, or $10.00 per share. Sales for the year were $148,555,269, representing an increase of 37% over the 1947 sales. An increase of 29% in volume of shipments is attributable to the high demand for building materials which prevailed throughout the year, and the new and enlarged production facilities that have been provided. Price increases averaging 8% offset increased expenses and costs of production. Cash dividend distributions during the year totalled $10,137,978, of which $547,554 was paid to preferred stockholders and $9,590,424, or $6.00 per share, to the holders of common stock. Expenditures during the year for new plants and facilities, and for improvements and enlargements of other properties, amounted to $14,184,492. During the war there was an almost complete cessation of normal residential construction, and at the same time all plans for expanding the Company s facilities were necessarily

4 postponed. Upon the termination of hostilities, the country was faced with an unprecedented demand for housing, which called for the rapid expansion of the Company s capacities in all lines, but with particular emphasis on gypsum products. During the past three years the expenditures for new plants and facilities, and for improvements and enlargements of other properties, totalled $51,5 11,000. This program was financed by the retention, during the three-year period, of $32,325,000 of earnings, and by the sale of common stock, in the amount of $23,953,380, through the issuance of rights. The Company has continued to provide depreciation based upon the cost of assets when acquired or constructed, but it should be recognized that the current cost of replacements necessary to maintain the Company s properties at established standards is several times the original cost. This situation, together with the need for increased working capital, calls for a conservative financial policy. Industry capacity for production of materials manufactured by the Company is now generally adequate to meet the demand. More normal competitive conditions prevail. A lower level of residential construction activity is expected during the coming year. Respectfully submitted, SEWELL L. AVERY, Chairman of the Board.

5 United States and SUBSIDIARY Balance Sheet- Current Assets : ASSETS Cash... U.S. Government ($40,256,000) and other government securities, at cost (market quotations 840,916,ooo) Accounts receivable- Customers $ 14,153,047 Other ,809 Less-Reserve for doubtful receivables... $ 7,646,292 40,067,723 $ 15,094,856 1,062,561 14,032,295 Inventories, priced at the lower of cost or market- Raw materials and supplies , $ 10,915,047 Finished goods and work in process ,540,620 l&455,667 Total current assets $ 76,001,977 Plant and Equipment (at cost, including acquisitions forcapital stock,less reductionsin 1932 and 1939): Land, mineral deposits and timber $ 10,642,608 Less-Reserve for depletion ,493,560 $ 8,149,048 Buildings and equipment $101,739,886 Less-Reserve for depreciation ,633,417 64,106,469 72,255,517 Prepaid Expenses and Other Assets.. 2,512,364 $150,769,858

6 Gypsum Company COMPANIES December 31, 1948 LIABILITIES AND STOCKHOLDERS INVESTMENT Current Liabilities: Accounts payable ,161,486 Accrued expenses and miscellaneous taxes ,395,564 Federal and Canadian taxes on income ,496,181 Total current liabilities... S 20,053,231 Stockholders Investment : Preferred stock- Authorized 100,000 shares, $100 par value, 70/, cumulative and noncallable; outstanding 78,222 shares (after deducting 9,055 shares held in treasury) S 7,822,200 Common stock- Authorized 3,000,OOO shares, $20 par value; outstanding 1,599,354 shares (after deducting 51,690 shares held in treasury, including 472 shares subject to option agreements with certain officers and employees) ,987,080 Paid-in surplus- arising from sale of stock for amounts in excess of par value ,800,367 Earned surplus -representing earnings reinvested in the business, after deducting all dividends ,106, ,716,627 $150,769,858

7 United States Gypsum Company ~2nd SUBSIDIARY COMPANIES Statement of Earnings for the Years Ended December 31, 1948 and 1947 Income : Net sales.... $148,555,269 $108,405,538 Income from securities , ,649 Royalties and miscellaneous income (net) , ,180 Total income $149,467,385 $109,594,367 Deductions: Cost of products sold- Plant wages and salaries.... Materials, services and other costs ,082,110 $ 19,992, ,906,302 48,201,533 Provision for depletion and plant depreciation... 4,637,257 2,796,298 Total... $ 96,625,669 $ 70,990,756 Selling, general and administrative expenses ,678,028 12,226,867 Federal and Canadian taxes on income... 14,567,OOO 9,845,OOO Total deductions.... $124,870,697 $ 93,062,623 Net earnings for year ,596,688 $ 16,531,744

8 United States Gypsum Company and SUBSIDIARY COMPANIES Statements of Surplus for the Years Ended December 31, 1948 and 1947 PAID-IN SURPLUS Balance at beginning of year $21,800,367 $ 5,831,447 Premium of $40 per share on sale of 399,223 shares of common stock,, ,968,920 Balance at end of year $21,800,367 $21,800,367 EARNED SURPLUS Balance at beginning of year.... $54,648,270 $45,054,696 Net earnings for year... 24,596,688 16,531,744 Total... $79,244,958 $61,586,440 Deduct-Cash dividends on- Preferred stock ($7.00 per share) ,554 $ 547,554 Common stock ($6.00 per share in 1948 and $4.00 in 1947) ,590,424 6,390,616 Total $10,137,978 $ 6,938,170 Balance at end of year..... _... _ $69,106,980 $54,648,270

9 United States Gypsum Company and SUBSIDIARY COMPANIES Statement of Money Provided From Operations and Its Disposition For the Year Ended December 31, 1948 Money Provided From Operations: Net earnings for year $24,596,688 Provision for depletion and depreciation (charged against earnings, to provide funds for future replacements) ,919,018 Other ,034 Total... $29,798,740 Disposition Of Money Provided : Additions and improvements to plant and equipment $14,184,492 Dividends paid ,137,978 Retained as additional working capital (cash, securities, receivables and inventories) ,476,270 Total $29,798,740

10 Auditors Certificate To the Board of Directors, United States Gypsum Company: We have examined the balance sheet of UNITED STATES GYPSUM COMPANY (an Illinois corporation) AND SUBSIDIARY COMPANIES as of December 31,1948 and the related statements of earnings, surplus, and money provided from operations and its disposition for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we con- sidered necessary in the circumstances. In our opinion, the accompanying balance sheet and related state- ments of earnings, surplus, and money provided from operations and its disposition present fairly the financial position of United States Gypsum Company and subsidiary companies as of December 31, 1948 and the results of their operations for the year then ended, and were prepared in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Chicago, Illinois, February 7, ARTHUR ANDERSEN 81 Co.

11 ASSETS United States and SUBSIDIARY Comparative Balance Current Assets: 1948 Cash $ 7,646,292 U.S. and other government securities ,867,723 Accounts receivable (net) ,032,295 Inventories , ,455,667 $3 76,001,977 Construction Program Fund $ - Plant and Equipment: 1947 $ 6,979,083 30,5 10,946 12,254,958 10,985,394 $ 60,730,381 S WOO Gross $112,382,494 $ 99,778,207 Less-Reserves for depletion and depreciation... 40,126,977 36,159,327 Net $ 72,255,517 $ 63,618,880 Prepaid Expenses and Other Assets.... g 2,512,364 $ 2,147,261 Total.... $150,769,858 $132,496,522 LIABILITIES AND STOCKHOLDERS INVESTMENT Current Liabilities : Accounts payabie... $ 2,161,486 Accruedexpenses... 3,395,564 Federal and Canadian taxes on income $ 20;053;231 Stockholders Investment : Preferred stock.... $ 7,822,200 Common stock ,987,080 Paid-in surplus ,800,367 Earned surulus Total... Excess of Current Assets over Current Liabilities $ 55,948,746 $ 3,631,670 2,712,087 9,914,148 $ 16,257,905 $ 7,822,200 31,967,780 21,800, $130;716;627 $116;238;617 $150,769,858 $ $ 44,472,476

12 Gypsum Company COMPANIES Sheets as of December $ 8,867,032 3y;,;;; 25,611,551 8:518;983 5,964,005 9,799,219 6,8 10,026 $37,25 1,972 $47,252, $ 6,183, lj241 7,498,340 $45,228, $ 4,667,505 26,058, $ $ 4,211,248 23,403,756 2;;;s:;; $43:167:990 $17,000, s - s - $73,306,496 33,780,162 3;ygg $39,526,334 $32;052:652 $62,930,035 30,368,497 $32,561,538 $62,129,389 28,296,392 $33,832,997 $63,098,332 27,591,938 $35,506,394 $ 1,915,301 $ 1,773,061 $ $81,078,327 $ 1,562,911 $79,352,900 $ 1,548,470 $ $ 1,349,081 $80,023,465 8 g,;e 7:925:910 $13,016,644 $ 1,614,551 1,283,692 4,527, $ 2,338,120 1,443,004 3,336,685 $ 7,117,809 8 y;w; 3 :,gga;; 61091:999 7:839;586 $10,154,009 $11,185,859 $ 7,822,200 y;+$ 45;054:696 $82,676,963 $95,693,607 %J;;;>;g :040:829 $73,652,176 $81,078,327 $ 7,822,200 yg I224 %gjg %J;;$~~ 5183 (447 5:83&I-47 33,345,871 31,248,519 $70,942,3 18 $68,837,606 $8 1,096,327 $80,023,465 $24,235,328 $39,826,463 $38,110,642 $35,560,851 $31,982,

13 United States and SUBSIDIARY Comparative for the Year Income: 1948 Net sales... $148,555,269 Income from securities ,554 Royalties and miscellaneous income (net) ,562 Total income.... $149,467, $108,405, , $109,594,367 Deductions: Cost of products sold- Plant wages and salaries $ 27,082,110 $ 19,992,925 Materials, services and other costs ,906,302 48,201,533 Provision for depletion and plant depreciation.... 4,637,257 Total... $ 96,625,669 Selling, general and administrative expenses... 13,678,028 Federal and Canadian taxes on income ,567,OOO Total deductions... $124,870,697 Net earnings for year $ 24,596,688 2,796,298 $ 70,990,756 12,226, ,OOO $ 93,062, ,531,744 Earnings per share of common stock... $15.04 Dividends paid per share of common stock... $ 6.00 $10.00 $ 4.00

14 Gypsum Company COMPANIES Statement of Earnings Ended December $85,360,686 $65,786,336 $62,329,573 $59,266,127 $62,225, , , , , , , , , , ,094 $86,281,714 $66,530,472 $62,810,747 $59,710,473 $62,737,610 $16,047,956 $13,177,191 $13,150,307 $12,648,419 $11,600,892 38,139,711 33,873,672 31,135,971 27,001,125 27,140,643 2,215,254 2,121,744 2,120,329 2,158,180 2,500,622 $56,402,921 $49,172,607 $46,406,607 $41,807,724 $41,242,157 9,434,838 8,330,682 8,620,953 7,748,299 8,620,137 8,030,OOO 4,675,OOO ,116,OOO $73,867,759 $62,178,289 $58,583,560 $54,672,023 $57,085,294 $12,413, ,352, ,227, ,038, ,652,316 $9.90 $3.18 $3.07 $3.75 $4.27 $3.00 $2.00 $2.00 $2.00 $2.00

15 United States Gypsum Company Directors SEWELL L. AVERY, Chicago, Ill. WALDO A. AVERY, Detroit, Mich. CHAMP CARRY, Chicago, Ill. C. A. ENGLISH, Arcadia, CaZv. W. L. KEADY, Chicago, Ill. A. F. KING, New York, N. Y. (deceased) *OLIVER M. KNODE, Chicago, III. JOHN E. MACLEISH, Chicago, Ill. W. B. MCMILLAN, St. Louis, MO. WALTER P. PAEPCKE, Chicago, III. H. F. SADLER, Chicago, Ill. C. H. SHAVER, Chicago, Ill. ~SOLOMON A. SMITH, Chicago,IZZ. LOUIS WARE, Chicago, Ill. L. S. WESCOAT, Chicago, Ill. *Chairman of the Executive Committee tchairman of the Finance Committee Chairman of the Board SEWELL L. AVERY President W. L. KEADY Vice-President H. F. SADLER Vice-President EDWARD REMBERT Vice-President J. H. NOLD Vice-President J. P. SANGER Vice-President OTIS WACK Secretary and Treasurer C. H. SHAVER Subdiary Companies UNITED STATES GYPSUM COMPANY (Delaware) CANADIAN GYPSUM COMPANY, LIMITED TORONTO ASPHALT ROOFING MFG. Co., LTD. GYPSUM PACKET COMPANY, LIMITED GYPSUM TRANSPORTATION COMPANY PANAMA GYPSUM COMPANY, INC. 1141

16 United States Gypsum Company ALBANY ATLANTA BALTIMORE BIRMINGHAM BOSTON BUFFALO CHARLOTTE CHICAGO CINCINNATI CLEVELAND DALLAS DENVER DETROIT GRAND RAPIDS HARRISBURG HOUSTON INDIANAPOLIS JACKSONVILLE KANSAS CITY Los ANGELES MILWAUKEE Genera 2 Ofice 300 West Adams Street CHICAGO 6, ILLINOIS t 1 Sales O$ices General Counsel SCOTT, MACLEISH & FALK MINNEAPOLIS MONTREAL NEWARK NEW HAVEN NEW YORK OKLAHOMA CITY OMAHA PHILADELPHIA PHOENIX PITTSBURGH PORTLAND PROVIDENCE RICHMOND SACRAMENTO ST. LOUIS SALT LAKE CITY SAN FRANCISCO SEATTLE SYRACUSE TORONTO WASHINGTON Transfer Agents UNITED STATES GYPSUM COMPANY, Chicago, Ill. THE CHASE NATIONAL BANK, New York, N. Y. Registrars of Transfers THE NORTHERN TRUST COMPANY, Chicago, Ill. MANUFACTURERS TRUST COMPANY, New York, N. Y. IN

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