1958 年伯克希尔完整年报

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CLEVELAND PUBLIC LIBRARI CORPORATION FILE BUSINESS INF. BUR BERKSHIRE Bff HATHAWAY INC. Annual Report to the Stockholders > 1958

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BERKSHIRE ) HATHAWAY INC. Annual Report For the Year Ended September 27, 1958 TO THE STOCKHOLDERS OF BERKSHIRE HATHAWAY INC. Our industry continued to suffer from a severe depression throughout the fiscal year ended September 27, 1958, and our operations showed a substantial loss due to the resulting low prices obtainable for textile fabrics and the costs of the necessary reorganization of the company's plants and manufacturing facilities. situation has improved During the past few weeks, however, the demand for textiles has strengthened and the , so that it now appears that the difficulties which have beset your company during the last two years have been largely overcome. GENERAL Early in 1957 it became increasingly obvious that textiles were entering a period operate many of its high-cost plants and merchandise their production at a profit. of serious depression, and it was decided that your company could no longer The directors decided that it would be to the ultimate best interests of the stockholders to permanently close and liquidate the highest cost plants with their obsolete machinery, and to modernize and consolidate the remainder, reducing the total over-all operations to a volume which could be merchandised at a profit after the recession had run its course. It was recog nized that this program would result in a reduction in working capital and in substantial operating losses during the time required for its completion, but it was anticipated that the working capital. This expectation is being realized. receipts from the liquidation of the plants not needed would partially offset the reduction in During the past eighteen months, the executive and administrative personnel and the and manufacturing facilities. As a result of this complete revision of all of the facilities of company's operating policies have been reorganized in addition to the changes in the plants the company, operating and administrative costs have been very substantially reduced and your company is now beginning to benefit from the results of this program. Each of the remaining eight operating units, including the Finishing Plant, will be expected to justify its continuance by operating at a profit. FINANCIAL tion of $1,941,476, and included unabsorbed burden due to curtailed opera- The net loss for the year before special items was $4,585,696, after deprecia- tions, inventory markdowns caused by falling market prices during the year, and the addi- tional costs resulting from the consolidation and modernization program. The additional loss of from the sale of properties and equipment, idle plant expense of $420, 194, loss from sale of $389,763 listed in the operating statement under Special Items includes a profit of $521,243 investments of $90,811, and a reserve of $400,000 established for future losses which it is estimated will occur in the disposal of the land, buildings and machinery still to be sold. ended September 28, 1957. Sales were $61,956,404 this year, compared with sales of $66,098,223 for the fiscal year WORKING CAPITAL The financial position of the company continues to be strong as of the AND NET WORTH end of the fiscal year, with net working capital of $23,967,827 and of the stock. net worth of $39,927,846, indicating a value substantially above the present market price

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EQUIPMENT PLANTS AND During the fiscal year ended September 27, 1958, expenditures capitalizec in connection with improvements in machinery and plant facilities amounted to $1,279,847. Receipts from the sale of machinery, land and buildings were $1,106,585. From January 1, 1957 to the end of our fiscal year, September 27, 1958, the following dation: Greylock Division in North Adams, Massachusetts; Berkshire Division in Adams, plants have been permanently closed and have either been sold or are in the process of liqui- Massachusetts; Holyoke Division in Holyoke, Massachusetts; Fort Dummer Division in Brat- Warren, Rhode Island. tleboro, Vermont; and the Curtain Factory, Repair Division and Warehouse Buildings in The market for second-hand textile machinery and buildings has been overloaded for the past several years, owing to the large number of mill liquidations which have taken place in all sections of the country, and it has been extremely difficult to find customers for our machinery and properties. Despite these conditions, however, the land, buildings and a large part of the machinery siderable number of houses and other land and buildings not needed in the operation of the at the Greylock, Fort Dummer and Holyoke Divisions have been sold, together with a con- iners of the Berist needed in tigether with a con company. The land, buildings and machinery of the Berkshire Division at Adams and the machinery at Plant B in Fall River, Massachusetts have been offered for sale. RELATIONS duction of new processes and operating techniques. With the cooperation of EMPLOYEE The installation of new machinery has provided an opportunity for the intro- improved, and substantial reductions in unit costs have been accomplished. our employees and their union representatives, operating efficiencies have been tremendously It is our expectation that our employees will continue to work with us in maintaining our tions will remain on the mutually cooperative basis so necessary to the future success of the present competitive position in relation to other mills in the industry, and that our labor rela- company. PRESENT OPERATIONS in place in a total of fourteen plants in New England. We now have 480,980 On January 1, 1957, the company had 874,332 spindles and 19,214 looms spindles and 12,610 looms, located in three plants in Massachusetts and four plants in Rhode Island, and also own a finishing plant in Lonsdale, Rhode Island. All of these spindles and are now in effect in areas where labor shortages exist. looms are now scheduled to operate five days, three shifts per week, and training programs MERCHANDISING As a result of this decrease in capacity we expect to be able to merchan- dise our present production profitably without the periodical increases in inventory which have been so costly to the company and which have had a depressing impact on the market at times in the past. This will be a basic part of our merchandising policy in the future. If necessary, changes will be made in our merchandising techniques or in our operating facilities in order that sales and production may be brought into balance. FUTURE PROSPECTS pany's higher cost mills, coupled with the modernization of the remaining The disposal of obsolete machinery and the permanent closing of the com- plants and the resulting increase in efficiency and productivity, have reduced our operating costs so that we are now in a competitive position. of the Fablith on enlah ere aer er then the are were ad The deman and mont and synthetic textile fabrics has increased recently, and prices are beginning to strengthen. We believe, therefore, that we will be able to maintain full-time present production of our looms and resume profitable manufacturing operations during the coming year. MALCOLM G. CHACE, R. Chairman of the Board November 19, 1958 SEABURY STANTON President

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BERKSHIRE HATHAWAY INC. FISCAL YEARS- 1958 1957 1956 1955 Sales $61,956,405 $66,098,223 $68,042,770 $65,498,284 Net earnings (loss) • (4,975,460) (3,258,035) 922,548 300,722 Earnings (loss) per share of common stock . ... (2.36) (1.55) .41 .13 Cash dividends paid per share of common stock None .50 1.00 1.00 Net expenditures for plant assets 173,262 1,622,760 1,334,158 1,201,470 Working capital . 23,967,827 26,401,396 31,426,569 33,022,161 Total stockholders' equity 39,927,846 44,903,306 50,369,720 51,399,756 Common shares outstanding 2,105,969 2,105,969 2,246,114 2,294,564 NOTE: "Common shares outstanding" represents the total shares outstanding at adjusted. "Cash dividends paid" also includes those of the Hathaway Manufac- the close of each fiscal year, including the Hathaway Manufacturing Company as turing Company.

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BERKSHIRE Consolidated

• ASSETS -

September 27, 1958 September 28, 1957 CURRENT ASSETS: Cash. $ 2,472,525.38 $ 2,002,657.32 Accounts receivable (less allowance for doubtful accounts— 1958—$353,644.31) . 7,184,447.90 Recoverable federal taxes on income 8,050,844.28 -0- 872,118.72 Marketable securities -0- 165,826.61 Inventories (Note A): Raw materials 4,159,314.15 3,185,294.62 Stock in process. 3,593,439.59 4,057,854.56 Cloth 14,457,986.94 16,723,821.46 Waste . 200,256.65 98,791.67 22,410,997.33 24,065,762.31 TOTAL CURRENT ASSETS 32,067,970.61 35,157,209.24 INVESTMENTS AND OTHER RECEIVABLES: Investments. 115,000.00 518,793.00 Notes and other amounts receivable 144,504.07 122,938.91 259,504.07 641,731.91 PROPERTIES, PLANTS AND EQUIPMENT (Note B): Properties comprising land, buildings, machinery and equipment 38,500,198.69 39,421,102.14 Less accumulated depreciation and amortization 23,079,412.05 22,615,523.07 Less estimated loss on properties to be sold 15,420,786.64 400,000.00 16,805,579.07 -0- 15,020,786.64 16,805,579.07 DEFERRED CHARGES AND OTHER ASSETS: Prepaid insurance, taxes and other assets 452,677.47 621,165.91 Mill supplies inventory, fuel, etc.. 227,050.83 433,433.50 679,728.30 1,054,599.41 TOTAL ASSETS. $48,027,989.62 $53,659,119.63 See accompanying note

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HATHAWAY INC. Balance Sheet — LIABILITIES AND STOCKHOLDERS' EQUITY - September 27, 1958 28, 1957 September CURRENT LIABILITIES: Notes payable-bank $ 4,500,000.00 $ 3,350,000.00 Accounts payable 2,266,842.51 3,836,392.42 Accrued wages and salaries 483,298.75 469,881.10 Accrued state and local taxes .. 382,391.74 664,056.53 Social security and withholding taxes payable 467,610.34 435,483.41 TOTAL CURRENT LIABILITIES. 8,100,143.34 8,755,813.46 STOCKHOLDERS' EQUITY: Common stock ($5 par value) authorized 3,000,000 shares-issued 2,294,564 shares 11,472,820.00 11,472,820.00 Excess of net assets received over common stock issued or cost of subsidiary acquisition (capital surplus) • 2,738,105.50 2,738,105.50 Earnings retained in the business (earned surplus) • 27,562,824.26 32,538,284.15 41,773,749.76 46,749,209.65 Less 188,595 shares common stock in treasury at cost. 1,845,903.48 1,845,903.48 39,927,846.28 44,903,306.17 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $48,027,989.62 $53,659,119.63 s to financial statements

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BERKSHIRE BH HATHAWAY INC. Condensed Consolidated Statement of Income September Years Ended 27,1958 September 28, 1957 SALES $61,956,404.79 $66,098,223.42 Cost of goods sold, administrative and selling expenses 64,408,878.76 67,989,113.61 Depreciation 1,941,476.64 1,928,113.67 66,350,355.40 69,917,227.28 OPERATING LOSS (4,393,950.61) (3,819,003.86) Other income . 190,764.19 182,451.73 (4,203,186.42) (3,636,552.13) Other charges 382,510.29 260,255.04 NET LOSS BEFORE THE FOLLOWING (4,585,696.71) (3,896,807.17) Special Items Gain from sale of properties and equipment. 521,243.19 16,684.41 Reserved for loss on properties and equipment to be sold (400,000.00) -0- Idle plant expense (includes depreciation— 1958—$137,821.21). • (420,194.62) (247,631.08) Loss from sale of investments. (90,811.75) -0- Recoverable federal taxes on income -0- 869,718.72 (389,763.18) 638,772.05 NET LOSS AND SPECIAL ITEMS ($4,975,459.89) ($3,258,035.12) Statement of Earnings Retained in the Business EARNINGS RETAINED IN THE BUSINESS AT BEGINNING OF YEAR $32,538,284.15 $36,739,562.28 Net loss and special items for the year. (4,975,459.89) (3,258,035.12) Prior years' provision for federal taxes on income not required . -0- 164,620.49 Dividends paid . . -0- (1,107,863.50) EARNINGS RETAINED IN THE BUSINESS AT END OF YEAR • $27,562,824.26 $32,538,284.15 See accompanying notes to financial statements We have examined the consolidated balance sheet of Berkshire Hathaway Inc. and its subsidiaries as of September 27, CERTIFICATE OF AUDITORS 1958 and the related statements of income and earnings retained in the business for the year then ended. Our examination records and such other auditing procedures as we considered necessary in the circumstances. was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting in the business present fairly the company's consolidated financial position In our opinion, the accompanying consolidated balance sheet and related statements of income and earnings retained results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a at September 27, 1958 and the consolidated basis consistent with that of the preceding year. Providence, R. I., October 31, 1958 COMERY, DAVISON & JACOBSON Certified Public Accountants

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BERKSHIRE Bff HATHAWAY INC. Notes to Consolidated Financial Statements For the Year Ended September 27, 1958 Basis of Consolidation The consolidated financial statements include the accounts of all subsidiary companies, including a Canadian subsidiary. Corporate Changes During the fiscal year, Warren Textile & Machinery Supply Co. was liquidated into the parent company. Note A - Inventories Berkshire Hathaway Inc.: Raw materials are priced at the lower of cost or market. The cotton content of stock in process of Berkshire Divisions is priced at a standard established in 1933, which is substantially less than the current market. standard costs are used in valuing labor and manufacturing burden in stock in process. Cloth is priced at the lower of The material content of stock in process of the Hathaway Division is priced at the lower of cost or market. Current cost or market. All costs were determined generally on an average basis. Waste is valued at market. Bourne Mills (a wholly owned subsidiary): The cotton content of the inventory at Bourne Mills is priced on the basis at the lower of cost or market. Labor and manufacturing burden are valued at standard costs and the total inventory of last-in, first-out except for goods purchased from Berkshire Hathaway Inc. and miscellaneous cloth which are stated value is less than market. The inventories of its subsidiaries are priced at the lower of cost or market on a first-in, first- Note B - Properties, Plants and Equipment $15,020,786.64 and $16,805,579.07, respectively. The net values used for federal income tax purposes were The properties, plants and equipment at September 27, 1958 and September 28, 1957 are stated at net book values of $17,375,512.25 and $18,760,789.25, respectively. Depreciation has been charged to operations on the tax basis. Note C - Taxes on Income income tax returns for fiscal years 1954 through 1957. A net refund of taxes on income of approximately $45,000 Tentative agreement has been reached with the Treasury Department on review of Berkshire Hathaway Inc. federal resulting from this review has not been recorded in the accounts. Federal income tax returns of Bourne Mills have been examined through 1955. Substantial loss carry-forwards are available to apply against federal taxes on income for future years. Note D - Pension Plans and Retirement Separation Benefits For the current fiscal year the company made contributions to the trustees for the pension plans amounting $86,992.15, this being the estimated minimum payment permissible under the plans. The company is contingently liable for retirement separation pay of certain employees who have reached the retirement liability does not become fixed until the actual retirement of eligible employees. As of September 27, 1958 the estimated age with a minimum service of fifteen years and who retire voluntarily. Under the terms of the union contract such liability under the contract was $143,000. Note E — Purchase Commitments Plant improvement commitments are approximately $100,000. The company has outstanding raw material commitments amounting to $3,770,000 at prices approximating market.

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BERKSHIRE Bff HATHAWAY INC. The Company had 10,433 stockholders on September 27, 1958 DIRECTORS MALCOLM G. CHACE, Jr., Chairman JONATHAN CHACE JOHN H. McMAHON LINSLEY V. DODGE WILLIAM A. O'HEARN BRADFORD R. FROST EDMUND RIGBY ARTHUR INGRAHAM, JR. OTIS C. STANTON W. R. L. McBEE SEABURY STANTON A. N. WINSLOW, JR. EXECUTIVE COMMITTEE SEABURY STANTON, Chairman MALCOLM G. CHACE, JR. W. R. L. McBEE A. N. WINSLOW, JR. OFFICERS SEABURY STANTON, President EDMUND RIcBY, Vice President, Treasurer & Clerk Administrative Sales WILLIAM H. POTTER Vice President LINSLEY V. DODGE Vice President JOHN J. McMAHON Vice President OTIS C. STANTON Vice President JoHN K. STANTON, Assistant Treasurer BERTRAND D. MANLEY Vice President

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BERKSHIRE BH HATHAWAY INC. EXECUTIVE OFFICES 704 Hospital Trust Building, Providence, R. I. SALES OFFICES 1430 Broadway, New York, N. Y. 3028 East 11th Street, Los Angeles, Calif. 363 Adelaide St., West, Toronto, Canada PLANT LOCATIONS Hathaway Div., New Bedford, Mass. King Philip Div. D, Warren, R. I. King Philip Div. A, Fall River, Mass. Valley Falls Div., Albion, R. I. King Philip Div. E, Fall River, Mass. Coventry Div., Anthony, R. I. King Philip Div. B, Fall River, Mass. (Warehouse) Bourne Mills, Tiverton, R. I. Finishing Plant, Lonsdale, R. I. LABORATORIES New Bedford, Mass. Lonsdale, R. I. TRANSFER AGENTS OLD COLONY TRUST CO. THE CHASE MANHATTAN BANK 45 Milk Street 18 Pine Street Boston, Mass. New York, New York AUDITORS COMERY, DAVISON & JACOBSON Providence, R. I.

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BERKSHIRE HATHAWAY INC.