February 15, 1957
Chairman Reports Record Year For Company
Harvey S. Firestone^ Jr»
★ ★ ★
All Directors Re-elected
Harvey s. firestone, jr., chairman, reported to stockholders at
their annual meeting Saturday, January 19, a profit of $60,538,848,
the highest ever earned by any company in the rubber industry. Sales for
fiscal 1956 were $1,115,179,783, a record high for Firestone.
“This profit is the largest ever made by any company in the history
of the rubber industry,” Mr. Firestone said, “and it is the first time that
the annual profit of any company in the industry has exceeded $60,000,000.”
He revealed that during fiscal 1956 Firestone had carried out the
largest program of modernization and expansion in its 56-year history,
investing more than $58,500,000 for additions to and improvements of
plants and equipment.
“Our company is in an excellent position for 1957,” he said. “Our
production facilities are equipped to turn out more and better products
with greater efficiency than ever before.”
At the stockholders’ meeting the nine directors of the company were
re-elected. They are: Harvey S. Firestone, Jr., Lee R. Jackson, Raymond C.
Firestone, James E. Trainer, John J. Shea, Harvey H. Hollinger, Leonard
K. Firestone, Roger S. Firestone and Joseph Thomas.
The complete text of Mr. Firestone’s address at the meeting follows:
* * *
ON BEHALF of the Board of Directors, it is my pleasure to report
to you the progress of The Firestone Tire & Rubber Company for the
fiscal year ended October 31, 1956. Our net sales and net profits were the
largest in our history. Net sales amounted to $1,115,179,783 compared with
$1,114,870,187 last year.
Net income amounted to $60,538,848 equal to $7.43 a share of
Common Stock, compared with $55,378,916 equal to $6.81 per share of
Common Stock last year. This profit is the largest ever made by any
company in the history of the rubber industry, and it is the first time that
the annual profit of any company in the industry has exceeded $60,000,000.
Profits of foreign subsidiaries were $13,080,665.
Federal, state and foreign taxes totaled $128,375,793 of which
income taxes were $59,250,000; excise taxes $55,222,722; social security
taxes $6,257,264 and other taxes $7,645,807.
We redeemed $4,350,000 of long-term debt and $1,200,000 of Pre
ferred Stock. Net working capital at the close of the year was $321,281,115
compared with $308,185,327 on October 31, 1955.
During the fiscal year, dividends of $2.60 per share were paid on the
Common Stock of the Company. Aggregate dividends on Common and
Preferred Stock amounted to $21,294,388.
ADDITIONS to and improvements in plants and equipment
amounted to $58,570,529 compared with $55,723,138 for last year.
Provision for depreciation amounted to $36,933,867 compared with
$32,020,916 for the previous year.
Major additions were made to our plants at home and abroad and
a new plant for the manufacture of coated fabric products was established
at Magnolia, Arkansas. New tire factories are now under construction in
Cuba and in the Philippines. The adoption of fourteen-inch wheels by most
of the passenger car manufacturers for their 1957 models necessitated ex
tensive mechanical changes in all of our domestic tire factories.
Expanded capacity and improvements in processing equipment were
provided for the production of tires, natural and synthetic rubber, Foamex
foarn rubber, Velon plastics, metal products. Exon basic resins for plastics,
textiles, and Airide springs. Additional warehouse facilities were provided
at our plant in Brentford, England, and in our Buffalo, Columbus, Des
Moines, Peoria and Richmond sales districts. These will add to the effi
ciency and economy of our distribution.
The production capacities of our synthetic rubber plants at Lake
Harvey S. Firestone, Jr.
Charles, Louisiana, and Akron, Ohio, have been substantially increased.
When these plants were purchased from the Government in 1955, they had
a combined capacity of 129,600 long tons. When the present expansion
program is completed this year, capacity will be 230,000 long tons. To help
supply these plants, a new plant for the manufacture of butadiene, a
principal raw material of synthetic rubber, is under construction as the
first unit of a new Firestone petrochemical center which we are establish
ing on a 1,000-acre site at Orange, Texas. We also have a financial interest
in a synthetic rubber plant now under construction in England.
PRODUCTS introduced during the fiscal year include fourteen-inch
tires in most of our lines to fit the 1957 model passenger cars; newly
designed Supreme, Town & Country and De Luxe Champion passenger car
tires; new Transport and Super Mileage Lug truck tires; new wide-base
Rock Grip Excavator tires; nylon cord tires for light aircraft; improved
rigid Velon sheeting; additional Exon vinyl resin compounds; Airide
springs for passenger cars and for industrial vibration dampening; brake
lining for industrial applications; premix tanks for beverage dispensers!
hand wheel stampings for freight cars; stainless steel parts for jet en
gines ; components for color television tubes; steel balance rings for auto
matic washers; metal stampings for the automotive industry; and an all
purpose household rubber cement.
The demand for rubber abroad reached a new high, whereas
consumption in the United States declined as a result of the reduction
passenger car output. Natural rubber prices ranged from 52 cents ^
pound in December, 1955, to 26 cents in May, 1956. At the close of our
fiscal year the price was 35^/4 cents. The price of synthetic rubber remained
stable at 23 cents a pound. We are continuing to expand the use of syW'
thetic rubber both in our foreign and in our domestic plants.
(Continued on Page 4)
MR. FIRESTONE GAVE his annual address to stockholders at their
annual meeting on January 19 in Akron. Facing the stockholders are the
directors, all of whom were re-elected. Left to right: Roger S. Firestone,
Harvey H. Hollinger, John J. Shea, Joseph Thomas, Harvey S. Firesto^ 5
Jr., Lee R. Jackson, James E. Trainer, Leonard K. Firestone and Raym®*^