Evening journal. [volume] (Wilmington, Del.) 1888-1932, 1923-02-12

According 10 the report OF H. H.
Durham, president, the Hercules
Powder Company had net earnings
of s2.2s4,ss5 for the year ending De-
cember 81. 1929, compared with
ss2o.s64 for the previous year. The
net earnings were equal TO 1l.17
per cent. on the common stock com
pared with s.4S per cent for the pre-
vious year In his report President
Durham says:
"The balance sheet shows the con-
dition of your company at the close
of its tenth year Again this year
It includes Yaryan Rosin & Turpen-
tine Company and Hercules Explo-
sives Corporation of New York. The
entire issued capital stock OF each
is owned by the Hercules Powder
Company. The consolidated balance
sheet more truly represents your
compdny's condition than would its
own balance sheet alone, except
that it should be particularly I'M
derstood that the Aetna bonds are
solely a liability OF the Hercules
Explosions corporation.
Gross assets rs compared with
last year show an increase OF ST.
900. 900, the largest single Item being
the additional Aetna bonds acquired
in exchange for your company's pre-
ferred stock. The bonds so OBJ
tanned have not been cancelled, ex-
cept as required by the sinking fund.
and your company holds enough OF
these bonds TO cover sinking fund
requirements for several years.
other changes among the assets re-
suit from REIMBURSEMENT OF liquid
capital to secure the best interest
return until Increasing volume OF 4,
business shall require investment in
large inventories and accounts re-
ceivable. and perhaps plant extern
sions
AT a meeting held October "a |
1922. the stockholders adopted an
amendment to the charter, whereby
the authorized capital stock OF each
class has been doubled. The issue
Of common stock was doubled by
one hundred per cent. stock divi-
dend, paid November 25, 1899. and
during the year about s900.0 600 par
value preferred stock was issued in
exchange for Aetna bonds The
bonds shown on the balance sheet
are not all in the hands OF the pub
die, but include those held by our
lie. but include those held by your
company for future sinking fund re-
ouirements. Current liabilities are
hut a small fraction OF current as
sets and stand at the smallest figure
in the comprny's history. AS re-
serves have increased substantially
the same amount as plant invest
1nent, there IS no increase in the net
permanent investment
During the year all claims against
the Aetna Explosives Company
particularly Federal taxes-vere
finally determined and settled and
ell of the preferred stock held in
escrow was distributed. The Aetna
stockholders received the full price
provided in the purchase agreement,
without deduction, as the total OF
such claims was within the value OF
assets ctker than preferred stock,
specifically set aside for the purpose.
The inauguration OF the busi-
iess of the Aetna Explosives Com
,any with that Of The Hercules
7owder Company has hene fully ac-
omp1ished and the officials and en-
'loyes Of the Aetna company have |
zen absorbed in the Hercules or
anization. The amalgamarion has
Substantially strengthened the posi- 6
ion OF the enlarged company in the
commercial explosives field.
THE very substantial increase N l.
,rofits during the year was due p
to the absence OF inven-
DRY adjustments. All inventories
ave been scrutinized with great I
are. as in previous wears. but az
market prices for raw materials :
rave ceased to decline. adjustments :
nave been negligible, while in the
wo preceding years they amounted 7
% very considerable sums,
Absence OF inventory adjust
nents does not account for the en-
ire difference, and 1922 net profits
are better than the preceding year,
sven IL the adjustments be restored
10 the previous years earnings FOR
he sake OF comparison. Econo-
mics brought about through the
as well as special ef- :
'orts made to reduce expenses OF
svery sort, resulted in such rate
-ial Improvement in manufacturing
md selling costs, that with some in {
rease in volume of business, net
Profits increased, although the unit
'elling price received for explosives
Lveraged about IS per cent. lower
turing 1922 than in 1891, and the !
ost OF some important raw mate c
ials averaged higher.
Your company's explosives bust