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Report, May 15, 1947

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REPORT United States Radium Corporation December 31, 1946 OFFICERS DEAN S. EDMONDS Chairman C. B. LEE President JOHN E. PAUL Vice-President E.B. FISHER Vice-President G. CAMPBELL BECKET Secretary HERBERT A. WHITING Treasurer and Assistant Secretary DIRECTORS G. CAMPBELL BECKET DELANO W. LADD DEAN S. EDMONDS C.B. LEE E.B. FISHER RAYMOND R. MACHLETT JOHN E. PAUL UNITED STATES RAD BALANCE As of Decemb ASSETS Current Assets: Cash in banks and on hand $218,630 United States Government obligations (principally Treasury Savings Notes) - at cost and accrued interest (quoted market value $148,412) 148,408 Accounts receivable: Customers $ 78,116 Miscellaneous 3,208 81,324 Less Reserve 4,000 77,324 Inventories-at lower of cost or market 111,290 Total Current Assets 555,652 Investment in and Advances to Weksler Thermometer Corporation (a nonconsoli- dated subsidiary): Capital stock (Note 2) 12,680 Advances 31,952 44,632 Prepaid Expenses 7,951 Property, Plant and Equipment: Plant leased to others 14,303 Less Reserve for depreciation 3,956 10,347 Laboratory and mechanical equipment, including small tools and jigs $114,582 Automobiles 909 Office furniture and fixtures 14,340 129,831 Less Reserve for depreciation 71,162 58,669 69,016 Deferred Charges: Leasehold improvements, etc., less amortization 6,159 Patent expenses, less amortization 816 6,975 Goodwill-at record amount 1 $684,227 NOTES TO BALANCE SHEET (1) As a result of renegotiation proceedings pursuant to the Renegotiation Act, the Under-Secretary of War, upon the findings of the Price Adjustment Board, made unilateral determinations in respect of the years ended December 31, 1942, 1943 and 1944, demanding gross refunds of $460,000, $529,111 and $529,581 after adjustment for state taxes, or net refunds of $91,614, $104,596 and $105,760 after applicable Federal taxes on income for the respective years which amounts have been paid. The company has filed appeals with the Tax Court of the United States to recover these amounts plus the related reduction in postwar refunds of excess profits taxes resulting from the foregoing demands. A demand has been made by the Price Adjustment Board in respect to the year 1945 involving a gross refund of $83,793 or a net refund after applicable taxes of $23,462. Provision has been made in the accounts for the net refund demanded by the Price Adjustment Board. (2) The investment in capital stock of Weksler Thermometer Corporation represents 63% of the outstanding 6% cumulative preferred stock and 80% of the outstanding common stock of that corporation. Based on the audited balance sheet of Weksler Thermometer Corporation at December 31, 1946, the equity in the net assets applicable to the stockholdings of United States Radium Corporation was substantially in excess of the amount of the investment. CORPORATION SHEET 31, 1946 LIABILITIES Current Liabilities: Accounts payable $ 30,687 Federal income taxes withheld from salaries and wages 8,005 Accrued expenses: Taxes, other than Federal taxes on income $ 14,697 Other 7,311 22,008 Provision for Federal taxes on income and for renegotiation of Government contracts (Note 1) 74,463 Total Current Liabilities 135,163 Reserve for Contingencies 45,000 Capital Stock and Surplus: Capital stock: $7 Cumulative First Preferred Stock (redeemable at option of corporation or on dissolution at $100 per share) : Authorized and issued, 1,000 shares of a par value of $100 each 100,000 Less Purchased and held in treasury, 129 shares 12,900 87,100 Common, Class "A": Authorized, 64,000 shares of a par value of $2 each. Issued 59,600 shares $119,200 Less Purchased and held in treasury, 380 shares 760 118,440 205,540 Surplus (restricted in the amount of $13,660 pending retirement of treasury stock) : Capital surplus 91,585 Earned surplus (Note 1) 206,939 298,524 Total Capital Stock and Surplus 504,064 $684,227 ACCOUNTANTS' REPORT To THE BOARD OF DIRECTORS, UNITED STATES RADIUM CORPORATION, NEW YORK, N. Y. We have examined the balance sheet of United States Radium Corporation as of December 31, 1946. For the year then ended we have reviewed the system of internal control and the accounting procedures of the corporation and, without making a detailed audit of the transactions, have examined or tested accounting records of the corpo- ration and other supporting evidence, by methods and to the extent we deemed appropriate. Our examination was made in accordance with generally accepted auditing standards applicable in the circumstances and included all pro- cedures which we considered necessary. In our opinion, the accompanying balance sheet presents fairly the position of United States Radium Corporation at December 31, 1946, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. PEAT, MARWICK, MITCHELL & CO. New York, N. Y., April 15, 1947. TO THE STOCKHOLDERS OF UNITED STATES RADIUM CORPORATION The year 1946 presented many obstacles to a smooth and satisfactory transition from war to a peace-time economy. The numerous strikes in the early part of the year, with the resultant shortages in many basic materials, resulted in substantial operating losses for the Corporation during the first three months of the year. These losses were not completely made up until after mid-year, when an increased volume of watch and clock dial production became possible. Quality materials remained scarce during the entire year. This further complicated production schedules and increased the cost per unit of many of the various items manufactured. After all adjustments, Federal and States Taxes, and the payment of dividends at the annual rate of 60¢ per share on the Common and $7.00 per share on the Preferred Stock of the Corporation outstanding, there was added to the surplus account approximately $8,000.00. The first four months business of the current year 1947 has been reasonably satisfactory both from the standpoint of volume and profits, but there is evidence of a slackening of demand for the products currently in production. Should this trend continue, and many believe that it will, no one can accurately forecast just what effect it may have on the year's operations as a whole. Many basic materials remain scarce even at this time, but there is some evidence of improvement. The Renegotiation of excessive profits on war contracts for the year 1945 has been settled on a satisfactory basis. The Suits pending in the Tax Court of the United States covering amounts involved under Renegotiation for the years 1942, 1943 and 1944 should come to trial this coming Fall, but there is a possibility that the matter may not be reached until the Spring of next year. The Weksler Thermometer Corporation enjoyed a fairly satisfactory volume of business throughout the entire year and their operations resulted in a net income, after Federal Taxes, of $25,060.00. Business SO far this year, 1947, is running at approximately the same rate as last year's operations. Very truly yours, C. B. LEE, President May 15, 1947.

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    "ocrText": "REPORT\nUnited States Radium Corporation\nDecember 31, 1946\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 RAD\nBALANCE\nAs of Decemb\nASSETS\nCurrent Assets:\nCash in banks and on hand\n$218,630\nUnited States Government obligations (principally Treasury Savings Notes) - at cost and\naccrued interest (quoted market value $148,412)\n148,408\nAccounts receivable:\nCustomers\n$ 78,116\nMiscellaneous\n3,208\n81,324\nLess Reserve\n4,000\n77,324\nInventories-at lower of cost or market\n111,290\nTotal Current Assets\n555,652\nInvestment in and Advances to Weksler Thermometer Corporation (a nonconsoli-\ndated subsidiary):\nCapital stock (Note 2)\n12,680\nAdvances\n31,952\n44,632\nPrepaid Expenses\n7,951\nProperty, Plant and Equipment:\nPlant leased to others\n14,303\nLess Reserve for depreciation\n3,956\n10,347\nLaboratory and mechanical equipment, including small tools and jigs\n$114,582\nAutomobiles\n909\nOffice furniture and fixtures\n14,340\n129,831\nLess Reserve for depreciation\n71,162\n58,669\n69,016\nDeferred Charges:\nLeasehold improvements, etc., less amortization\n6,159\nPatent expenses, less amortization\n816\n6,975\nGoodwill-at record amount\n1\n$684,227\nNOTES TO BALANCE SHEET\n(1) As a result of renegotiation proceedings pursuant to the Renegotiation Act, the Under-Secretary of War, upon the\nfindings of the Price Adjustment Board, made unilateral determinations in respect of the years ended December 31,\n1942, 1943 and 1944, demanding gross refunds of $460,000, $529,111 and $529,581 after adjustment for state taxes, or\nnet refunds of $91,614, $104,596 and $105,760 after applicable Federal taxes on income for the respective years which\namounts have been paid. The company has filed appeals with the Tax Court of the United States to recover these\namounts plus the related reduction in postwar refunds of excess profits taxes resulting from the foregoing demands.\nA demand has been made by the Price Adjustment Board in respect to the year 1945 involving a gross refund of\n$83,793 or a net refund after applicable taxes of $23,462. Provision has been made in the accounts for the net refund\ndemanded by the Price Adjustment Board.\n(2) The investment in capital stock of Weksler Thermometer Corporation represents 63% of the outstanding 6%\ncumulative preferred stock and 80% of the outstanding common stock of that corporation. Based on the audited\nbalance sheet of Weksler Thermometer Corporation at December 31, 1946, the equity in the net assets applicable to\nthe stockholdings of United States Radium Corporation was substantially in excess of the amount of the investment.\nCORPORATION\nSHEET\n31, 1946\nLIABILITIES\nCurrent Liabilities:\nAccounts payable\n$ 30,687\nFederal income taxes withheld from salaries and wages\n8,005\nAccrued expenses:\nTaxes, other than Federal taxes on income\n$ 14,697\nOther\n7,311\n22,008\nProvision for Federal taxes on income and for renegotiation of Government contracts (Note 1)\n74,463\nTotal Current Liabilities\n135,163\nReserve for Contingencies\n45,000\nCapital Stock and Surplus:\nCapital stock:\n$7 Cumulative First Preferred Stock (redeemable at option of corporation or on\ndissolution 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\nof treasury stock) :\nCapital surplus\n91,585\nEarned surplus (Note 1)\n206,939\n298,524\nTotal Capital Stock and Surplus\n504,064\n$684,227\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, 1946. For the\nyear then ended we have reviewed the system of internal control and the accounting procedures of the corporation\nand, without making a detailed audit of the transactions, have examined or tested accounting records of the corpo-\nration and other supporting evidence, by methods and to the extent we deemed appropriate. Our examination was\nmade in accordance with generally accepted auditing standards applicable in the circumstances and included all pro-\ncedures which we considered necessary.\nIn our opinion, the accompanying balance sheet presents fairly the position of United States Radium Corporation\nat December 31, 1946, in conformity with generally accepted accounting principles applied on a basis consistent with\nthat of the preceding year.\nPEAT, MARWICK, MITCHELL & CO.\nNew York, N. Y., April 15, 1947.\nTO THE STOCKHOLDERS\nOF UNITED STATES RADIUM CORPORATION\nThe year 1946 presented many obstacles to a smooth and satisfactory transition from war\nto a peace-time economy. The numerous strikes in the early part of the year, with the resultant\nshortages in many basic materials, resulted in substantial operating losses for the Corporation\nduring the first three months of the year. These losses were not completely made up until after\nmid-year, when an increased volume of watch and clock dial production became possible. Quality\nmaterials remained scarce during the entire year. This further complicated production schedules\nand increased the cost per unit of many of the various items manufactured.\nAfter all adjustments, Federal and States Taxes, and the payment of dividends at the\nannual rate of 60¢ per share on the Common and $7.00 per share on the Preferred Stock of the\nCorporation outstanding, there was added to the surplus account approximately $8,000.00.\nThe first four months business of the current year 1947 has been reasonably satisfactory\nboth from the standpoint of volume and profits, but there is evidence of a slackening of demand\nfor the products currently in production. Should this trend continue, and many believe that it\nwill, no one can accurately forecast just what effect it may have on the year's operations as a\nwhole. Many basic materials remain scarce even at this time, but there is some evidence of\nimprovement.\nThe Renegotiation of excessive profits on war contracts for the year 1945 has been settled\non a satisfactory basis. The Suits pending in the Tax Court of the United States covering\namounts involved under Renegotiation for the years 1942, 1943 and 1944 should come to trial\nthis coming Fall, but there is a possibility that the matter may not be reached until the Spring\nof next year.\nThe Weksler Thermometer Corporation enjoyed a fairly satisfactory volume of business\nthroughout the entire year and their operations resulted in a net income, after Federal Taxes,\nof $25,060.00. Business SO far this year, 1947, is running at approximately the same rate as last\nyear's operations.\nVery truly yours,\nC. B. LEE, President\nMay 15, 1947."
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