Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-08-13
LARGE TOBACCO HOUSE
PLANS NEW STOCK ISSUE
Liggctt & Myers Co. Will Offer ST.
$4,000 z Per Cent Cumu-
lative Preferred.
PRESENT CAPITAL INADEQUATE
Far Out OF Proportion Of Enormous
Business Being Done - Dividend
Disbursements Have Been Made at
16 Per Cent.

For the purpose of providing addi-
tiona! working capital. the Liggctt X
Myers Tobacco Company, which has it's
principal plant in Richmond, is plan
ming new issue of S7.376.04O per
cent cumulative preferred stock. The
new stock will be issued as of October
1 next. and will be offered to stock
holders of record September 10 ut par
in proportion of one share OF new pre-
fcrred for each five shares of stock.
whether preferred or common, now
held by stockholders.
The capitalization Of the company Is
now far out OF proportion to the bust
ness being done. This is shown by COM
parison with the American Tobacco
Company. which. with the Liegett &
Myers concern, takes rank AS one of
the country's two largest tobacco
manufacturing companies. Authority
to issue the new preferred stock was
given by the stockholders three years
ago, but there was no intination that
the stock would be issued this year.
INCREASING BUSINESS MAKES
NEW ISSUE ADVISABLE
Sales of the Liggett & Myers Tobac-
CO Company last year were In excess
of s75,00O.000 while the capital stock
at present consists of S15.3S3.S00 OF
per cent preferred and s2l,496.400 of
common. The company also has out
standing S239G7.S00, of bonds. Sales
of the American Tobacco Company
proper. in the year just closed, were
slightly in excess of s7O,000.0oo, al
though now they are running we'll
above $4,000. 900. The capitalization
Of the American Tobacco Company
consists Of s52.S9o.7oo of per cent
preferred stock, s40,242,40o OF common
stock and s2.l26,1o0 OF bonds.
issue, in the Wall Street Journal. says:
The Liggctt e Myers Company com
mcnced business on December l. 1911.
with an amount of cash which hardly
seemed sufficient for the needs OF the
business. This has neccssitated tho
borrowing from time to time Of con-
siderable amounts of money. The con-
stantly increasing business OF the COM
pany since it's formation and In tho in
creased cost of all kinds of material.
especially leaf tobacco, make 1t adj
visablc, in the opinion Of tho board of
directors. to issue the additional pre-
fcrrcd stock"
The annual statement OF the LiSEctt
& Myers Company for the year end
ed December 81, last, showed that in
the five years of its existence sur
plus of sl3.00o,000 has been accumu-
lated. This alone was equal to SS5 a
share on tho preferred stock then out
standing. Cash on hand amounted to
close to s3,000,0o0 and accounts and
bills receivable were S6,2S9,S6S. Against
this were accounts and bills payable
OF S3,793,9l5.
In the five years of its existence the
LigGett S; Myers Company has shown
average earnings for the common
stock of about s25 share. Regular
dividends arc being paid on the junior
issue at the rate of 50 quarterly. For
the last four years an extra dividend
of 81 Il share has been paid each
spring. In other words, dividend dis
bursemcnts on the common stock have
been running at the rate OF 10 per
cent annually, which means that more
than S2,O0O.000 has been added each
year to surplus.