South Bend news-times., 1917-07-29
SALES SHOWING
AN IMP PROVEMENT
Studebaker Dividend viii be
Decided by Earnings of
First Six Months.

studebaker sales in the past five
weeks have shown steady improve
ment. and. while the outlook in the
motor industry Is still an uncertain
one. interests connected with the
company expect that recent i'm
provement in business will continue.
Inventory figures as Of June are
being completed and the board Of
directors at their meeting Aug. Z
VIII have before them the detailed
earnings statement for the first half
year, as well as sales results for
July on which 20 base their deci-
sion regarding the common divi-
dend The company has a floating
debt Of about S11, ,000 GOO. but pay
ments on the notes are being made
this month. and more viii be paid
of next month. The contraction in
sales following our entrance into
she war made necessary this bor-
rowing. but this situation is stead
ily righting itself
When the shock OF war cut down
purchasing of automobiles in late
April and May. Studebaker was
turning out about 200 cars a day.
or upwards Of 5000 cars a month.
and the restriction Of sales meant
Ibis output had 90 be carried and n
nanced by the company Produc-
ton was reduced 10 prevent further
accumulation Of unsold cars for a
while. but more recently. with i'm
proving sales. schedules have been
revised upward. Company officials
describe as absurd rumors that 90
600 unsold cars accumulated and
assert that at the peak there were
only about 5000 or 1000 cars ou
hand.
Bani,s Are Satisfied.
Studebaker at present has net
quick assets of S23.OOO.OOO in excess
OF current liabilities the latter in
Guiding floating debt, and the lead
ing banks which handle Studebaker
business are entirely satisfied as to
the financial standing of the com
pany
The company's plants are carried
on the books at S13,437.9SS. which
is after liberal depreciation charges.
so that the assets of the Stude ker
corporation amount 70 $36, 200,
or sufficient 70 provide par for the
s1O.e65.O0O preferred stock and
leave a balance of about S25, 100000
for the S3O.00O.OOO common stock
or SS5 per share.
Studebaker has pursued a conser-
vative policy in regard TO dividends.
From 1911 20 1914, when no com
mon dividends were paid. the com
pany earned an available distribu-
table balance Of s7.9S7,1O9. and in
1915 and 1915 when $4.396.5S0
common dividends were paid il
earned a distributable balance OF
s16.OSO.675. In the aggregate from
1911 10 1916. earnings on the com
mon stock totaled S24067.7S4. and
common dividends paid but $4,396,-
$50.
Earnings Not Satisfactory.
Earnings this year will be well
under the S7.S43.695 surplus for the
common reported for 1915. which
was equal 10 26.1 per cent on the
S2e.OOO.0e0 outstanding How far
under cannot be approximated al
this time. but a reduction of so per
cent would not be surprising. in view
Of the operations in the June quar-
ter. IL has always been the theory
OF A. r. E.rskine the president. tC
make shareholders intimate part
ners in the business. and when prof
its run large 10 distribute a suhstan-
tial return TO holders OF the stock
and when earnings fall off 10 restrict
dividends. The fact that the com
pany has floating debt Of $1,000
00o In itself. would not be consid-
cred deciding reason for curtailine
dividends by Studebaker interests
provided earnings were satisfactory
but earnings have not been satisfac-
tory. and Studet aker directors are
expected 20 take the conservativ,
course in their decision regarding
the common dividends a week from
next Tuesday