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    "title": "Report, May 5, 1945",
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    "seq": 5,
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    "ocrText": "REPORT\nUnited States Radium Corporation\nDecember 31, 1944\nOFFICERS\nDEAN S. EDMONDS\nChairman\nC. B. LEE\nPresident\nJOHN E. PAUL\nVice-President\nE. B. FISHER\nVice-President\nG. CAMPBELL BECKET\nSecretary\nHERBERT A. WHITING\nTreasurer\nand Assistant Secretary\nDIRECTORS\nG. CAMPBELL BECKET\nDELANO W. LADD\nDEAN S. EDMONDS\nC.B. LEE\nE.B. FISHER\nRAYMOND R. MACHLETT\nJOHN E. PAUL\nUNITED STATES RAI\nBALANCI\nAs of Decem\nASSETS\nCurrent Assets:\nCash in banks and on hand\n$ 150,120\nUnited States Government obligations (including U.S. Treasury Tax Savings Notes, $270,000)\n-at cost (quoted market value, $296,381) and accrued interest\n297,984\nNotes and accounts receivable:\nCustomers (including United States Government Departments, $391,084)\n$ 614,115\nMiscellaneous\n10,339\n624,454\nLess Reserve\n4,000\n620,454\nInventories-at lower of cost or market\n411,582\nTotal Current Assets\n1,480,140\nInvestment in and Advances to Weksler Thermometer Corporation (a nonconsoli-\ndated subsidiary) :\nCapital stock (Note 3)\n12,680\nAdvances\n32,629\n45,309\nPrepaid Expenses\n9,237\nPostwar Refund of Excess Profits Tax, as adjusted for possible renegotiation-estimated (Note 1)\n89,186\nProperty, Plant and Equipment:\nPlant leased to others\n14,303\nLess Reserve for depreciation\n2,846\n11,457\nLaboratory and mechanical equipment, including small tools and jigs.\n$128,522\nAutomobiles\n2,003\nOffice furniture and fixtures\n14,963\n145,488\nLess Reserve for depreciation\n61,215\n84,273\n95,730\nDeferred Charges:\nLeasehold improvements, etc., less amortization\n17,885\nPatent expenses, less amortization\n963\n18,848\nGoodwill-at record amount.\n1\n$1,738,451\nNOTES:\n(1) As a result of renegotiation proceedings pursuant to Section 403 of the Sixth Supplemental National Defense Appro-\npriation Act, 1942, as amended, the Under-Secretary of War, upon the finding of the Price Adjustment Board, made\na unilateral determination demanding a gross refund of $460,000 in respect of the year ended December 31, 1942, or\n$128,259, after applicable taxes. This amount, after deducting the applicable postwar refund of $36,646, was paid\nduring the year but an appeal has been filed with the Tax Court of the United States. Provision was made in the\naccounts for that year, after applicable taxes, of $128,500.\nA demand has been made by the Price Adjustment Board in respect of the year 1943 involving a gross refund of\n$550,000, or a net settlement after applicable taxes of $146,435. The net provision for renegotiation made in the year\n1943 in the amount of $150,000 exceeds by $3,565 the actual net refund to the Price Adjustment Board, plus the\nreduction in the postwar refund.\nFor the year 1944, provision has been made in the net amount of $148,500 on the basis of the demand made by the\nPrice Adjustment Board with respect to the year 1943.\n(2) During the year under review a complete revision of the New York Franchise Tax Law was made which included a\nchange in the privilege year and the date on which the tax accrues. As a consequence, the corporation is entitled to\ndeduct from taxable income of the current year New York State franchise taxes based on the income of two years, viz.,\nyear ended December 31, 1943 and year ended December 31, 1944, whereas there have been deducted in the com-\nparative statement of profit and loss franchise taxes based on income of the respective years. If this change in the\nlaw had been in effect in prior years, thereby permitting deductions from each year's taxable income of the franchise\ntax based on the income of the related year, the net income for the year 1943 would have been increased approxi-\nmately $6,200 and for the year 1944 would have been decreased approximately $36,700.\n(3) The investment in capital stock of Weksler Thermometer Corporation represents 63% of the outstanding 6% cumu-\nlative preferred stock and 80% of the outstanding common stock of that corporation. Based on the audited balance\nsheet of Weksler Thermometer Corporation at December 31, 1944, the equity in the net assets applicable to the stock-\nholdings of United States Radium Corporation was substantially in excess of the amount of the investment.\nCORPORATION\nSHEET\n31, 1944\nLIABILITIES\nCurrent Liabilities :\nAccounts payable\n$ 252,592\nIncome taxes withheld from salaries and wages\n14,348\nAccrued Expenses\nTaxes, other than Federal taxes on income\n$ 79,284\nOther\n12,518\n91,802\nProvision for Federal taxes on income and for renegotiation of Government contracts (Note 1)\n900,597\nTotal Current Liabilities\n1,259,339\nReserve for Postwar Adjustments and Contingencies\n45,000\nCapital Stock and Surplus\nCapital stock\n$7.00 Cumulative First Preferred Stock (redeemable at option of corporation\nor on dissolution at $100 per share) :\nAuthorized and issued, 1,000 shares of a par value of $100 each\n100,000\nLess purchased and held in treasury, 129 shares\n12,900\n87,100\nCommon, Class \"A\":\nAuthorized, 64,000 shares of a par value of $2 each.\nIssued, 59,600 shares\n$119,200\nLess purchased and held in treasury, 380 shares\n760\n118,440\n205,540\nSurplus (restricted in the amount of $13,660 pending retirement of\ntreasury stock) :\nCapital surplus\n91,585\nEarned surplus (Note 1)\n136,987\n228,572\nTotal Capital Stock and Surplus\n434,112\n$1,738,451\nACCOUNTANTS' REPORT\nTo THE BOARD OF DIRECTORS,\nUNITED STATES RADIUM CORPORATION,\nNEW YORK, N. Y.\nWe have examined the balance sheet of United States Radium Corporation as of December 31, 1944. For the\nyear then ended we have reviewed the system of internal control and the accounting procedures of the corpora-\ntion and, without making a detailed audit of the transactions, have examined or tested accounting records of the\ncorporation and other supporting evidence, by methods and to the extent we deemed appropriate. Except that it\nwas not practicable to confirm receivables from U.S. Government departments, as to which we satisfied ourselves\nby means of other auditing procedures, our examination was made in accordance with generally accepted auditing\nstandards applicable in the circumstances and included all procedures which we considered necessary.\nIn our opinion, the accompanying balance sheet presents fairly the position of United States Radium Corpora-\ntion at December 31, 1944, in conformity with generally accepted accounting principles applied on a basis consis-\ntent with that of the preceding year.\nPEAT, MARWICK, MITCHELL & CO.\nNew York, N. Y., March 31, 1945.\nTO THE STOCKHOLDERS\nOF UNITED STATES RADIUM CORPORATION\nThe attached Balance Sheet as of December 31, 1944, reflects the financial position of the\nCorporation, after provision for reserves to cover the Renegotiation of War Contracts com-\npleted during the year, together with Post War adjustments. The reserve for Renegotiation of\nWar Contracts was computed on the same percentage basis as the Price Adjustment Board has\noffered to allow for the preceding year. In the judgment of your Board of Directors, the offer\nof settlement for 1943 operations is not sufficiently liberal to compensate for the contingent\nliabilities imposed on the Corporation by the use of large quantities of Radium Element in\nwar production. The matter has apparently reached a state of impasse, and probably can only\nbe settled by resort to the Tax Court of the United States, a procedure followed in respect to\nRenegotiation for 1942.\nVolume of production and sales for 1944 was approximately the same as that for 1943 and\nresulted in a Net Profit after taxes, reserves and adjustments of $100,896. Of this amount,\napproximately $25,000 is represented by a Post War credit after adjustments applicable to\nRenegotiation. From a Profit and Loss standpoint on operations, the following schedule gives\na more complete picture of the year's business.\nGross Profit\n$1,179,821\nLess Selling, Administrative and General Expense\n263,017\n$ 916,804\nOther Charges, less Miscellaneous Income\n4,253\nNet Income, before provision for Federal Income Tax, Renegotia-\ntion and contingencies.\n$ 912,551\nLess Provision for Federal Income Tax, Renegotiation, Post War\nAdjustments and contingencies\n811,655\nNet Income transferred to Earned Surplus\n$ 100,896\nDuring the year, dividends were paid in the amount of $35,707. This was at the rate\nof Fifty Cents per share on the Common Stock and the established rate of $7.00 per share on\nthe Preferred.\nThe volume of sales for the Weksler Thermometer Corporation was somewhat in excess\nof that for 1943 and showed a Net Profit before Taxes and Renegotiation adjustments of\n$131,214. After Taxes and adjustments, the amount available for addition to Surplus was\n$31,639 which compares with $31,427 for 1943 operations.\nYour Management is aware of the problems which will confront it when the War is over\nand business returns to a Peace Time basis. Plans for this transition period have been formu-\nlated, some parts of which are already being carried out, and it is hoped that the adjustment\nmay be made without undue strain on our financial position.\nVery truly yours,\nC. B. LEE, President\nMay 5, 1945"
}