245125103.xls.

ms_office

AMERICAN CHEMICAL CORPORATION

Harvard Business School
Case Software 2-293-742
Copyright (c) 1987 by the President and Fellows of Harvard College.
Developed in conjunction with MicroMentor, Inc., Cambridge, MA.
This case was prepared as a basis for class discussion rather than
to illustrate either effective or ineffective handling of an
administrative situation.
This worksheet contains the data from the following exhibits:
Exhibit 1: Financial Statements of Large Chemical Companies
Exhibit 2: Financial Statements of Large Paper Companies
Exhibit 5: Financial Statements of Sodium Chlorate Producers
Exhibit 6: Financial Statements of the Collinsville Plant
Exhibit 7: Financial Statement of Dixon Corporation
Exhibit 8: Pro-Forma Financial Statements of Collinsville Plant
REVISION HISTORY
Date
11/12/84

Name
K. Gustafson

05/01/85
03/16/87
04/04/88

D. Stenberg
M. Colantoni
D. Lustiber

01/31/90

P. Brantley

2/1/1992

J. Royo

6/4/1992
7/2/1997

J. Royo
M. Sarmiento

Explanation of Change
Data Resources, Inc, Lexington, MA
Base implementation
Compressed per bug report
Converted to version 2.01
Converted for use with ELAI;
Changed all formulas to constants
MicroMentor, Inc., Cambridge, MA.
Converted to MicroMentor format
Harvard Business School, Boston, MA
Converted to Excel
Stripped HBSUTIL
Upgraded to Excel 7.0

Page 1

Harvard Business School

EXHIBIT 1 - Financial Statements
AMERICAN CHEMICAL
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
$4,828
323
$7.60
1.00
5.3%
$23
10
19
2.5
2,014
44%
0%
56%
1.20
6.3
BBB/A

1975
$4,671
198
$4.66
1.25
5.7%
$30
17
22
4.7
2,109
37%
0%
63%
1.20
3.9
BBB/A

1976
$4,805
212
$4.98
1.50
4.3%
$36
21
35
7.0
2,198
37%
0%
63%
1.20
4.1
BBB/A

1977
$5,235
251
$5.91
1.65
5.0%
$46
30
33
5.6
2,465
29%
0%
71%
1.20
4.3
BBB/A

1978
$5,490
349
$8.20
1.80
4.1%
$48
32
44
5.4
2,527
39%
20%
41%
1.20
6.7
BBB/A

ALLIED CHEMICAL
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
$2,216
151
$5.43
1.53
6.3%
$54
23
28
5.2
1,550
28%
0%
72%
1.43
9.2
A/A

1975
$2,333
116
$4.17
1.80
5.4%
$42
27
33
7.9
1,839
34%
0%
66%
1.43
5.7
A/A

1976
$2,630
117
$4.52
1.80
4.5%
$45
33
40
8.8
1,959
33%
0%
67%
1.43
5.2
A/A

1977
$2,923
135
$4.93
1.85
4.5%
$51
39
44
8.9
2,279
36%
0%
64%
1.43
5.4
A/A

1978
$3,268
120
$4.25
2.00
7.1%
$45
28
28
6.6
2,467
38%
0%
62%
1.43
4.9
A/A

DOW CHEMICAL
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
$4,938
558
$3.18
0.60
2.5%
$35
25
28
8.8
3,498
37%
0%
63%
1.25
10.6
A/Aa

1975
$4,888
616
$3.33
0.75
1.7%
$48
27
46
13.8
4,316
36%
0%
64%
1.25
8.2
A/Aa

1976
$5,652
613
$3.30
0.95
2.3%
$57
38
43
13.0
5,118
37%
0%
63%
1.25
6.5
A/Aa

1977
$6,234
566
$3.01
1.15
4.5%
$44
25
27
9.0
5,889
40%
0%
60%
1.25
4.9
A/Aa

1978
$6,888
575
$3.16
1.30
5.6%
$31
22
25
7.9
6,793
43%
0%
57%
1.25
4.4
A/Aa

Harvard Business School

DU PONT
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
$6,910
404
$2.74
1.83
6.0%
$60
28
31
11.3
4,874
16%
5%
79%
1.22
9.5
AAA/Aaa

1975
$7,221
272
$1.81
1.42
3.2%
$45
29
42
23.2
5,085
17%
5%
78%
1.22
4.1
AAA/Aaa

1976
$8,361
459
$3.10
1.75
3.7%
$54
39
45
14.5
5,772
22%
4%
74%
1.22
6.0
AAA/Aaa

1977
$9,435
545
$3.69
1.92
4.8%
$45
35
40
10.8
6,127
21%
4%
75%
1.22
6.1
AAA/Aaa

1978
$10,584
787
$5.39
2.42
5.8%
$46
33
42
7.8
6,394
17%
4%
79%
1.22
9.5
AAA/Aaa

MONSANTO
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
$3,498
323
$9.35
2.30
5.9%
$70
39
41
4.4
2,396
25%
0%
75%
1.43
11.4
AA/Aa

1975
$3,625
306
$8.63
2.55
3.4%
$81
41
76
8.8
2,942
29%
0%
71%
1.43
9.1
AA/Aa

1976
$4,270
366
$10.05
2.75
3.2%
$100
76
88
8.8
3,349
27%
0%
73%
1.43
8.4
AA/Aa

1977
$4,595
276
$7.46
3.03
5.4%
$89
52
58
7.8
3,668
28%
0%
72%
1.43
7.0
AA/Aa

1978
$5,019
303
$8.29
3.18
6.8%
$60
44
47
5.7
4,115
30%
0%
70%
1.43
6.5
AA/Aa

1975
$5,665
382
$6.23
2.40
3.9%
$67
40
61
9.8
4,485
30%
0%
70%
1.05
8.4
A/Aa

1976
$6,346
441
$7.15
2.50
4.0%
$77
56
62
8.7
5,212
32%
0%
68%
1.05
7.0
A/Aa

1977
$7,036
385
$6.05
2.80
6.8%
$62
40
41
6.8
5,750
30%
0%
70%
1.05
5.0
A/Aa

1978
$7,870
394
$6.09
2.80
8.2%
$43
34
34
5.6
5,997
28%
0%
72%
1.05
4.9
A/Aa

UNION CARBIDE
1974
Sales ($ millions)
$5,320
Net income ($ millions)
530
Earnings per share ($)
$8.69
Dividends per share ($)
2.18
Dividend yield (%)
5.3%
Common stock - high ($)
$46
Common stock - low ($)
32
Common stock - close ($)
41
Closing P/E
4.7
Total capitalization
3,752
% debt
26%
% preferred stock
0%
% common stock
74%
Beta
1.05
Interest coverage (a)
14.0
Bond rating (b)
A/Aa
Footnotes
(a) Equal to earnings before interest and taxes divided by interest
expenses.
(b) Standard & Poor's rating/Moody's rating.

EXHIBIT 2 - Financial Statements

UNIVERSAL PAPER
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

245125103.xls.ms_office
1974
1975
$1,867
$1,902
149
109
$3.60
$2.63
0.75
0.75
6.3%
3.9%
$17
$21
10
12
12
19
3.4
7.1
1,349
1,620
30%
29%
0%
0%
70%
71%
1.52
1.52
6.8
5.0
A/Aa
A/Aa

1976
$2,136
154
$3.72
0.75
2.5%
$34
18
30
8.1
1,787
32%
0%
68%
1.52
6.8
A/Aa

1977
$2,248
168
$4.06
0.85
2.8%
$36
24
30
7.4
1,938
32%
0%
68%
1.52
7.4
A/Aa

1978
$2,525
191
$4.61
1.00
3.6%
$38
26
28
6.0
2,018
33%
0%
67%
1.52
8.2
A/Aa

CROWN ZELLERBACH
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
$1,172
125
$5.06
1.75
7.5%
$40
20
24
4.7
1,220
33%
1%
66%
1.03
8.1
A/A

1975
$1,767
75
$3.01
1.80
5.1%
$41
24
36
12.0
1,290
33%
1%
66%
1.03
4.5
A/A

1976
$2,136
98
$3.88
1.80
4.0%
$49
36
43
11.6
1,345
31%
1%
68%
1.03
5.3
A/A

1977
$2,318
109
$4.34
1.83
5.6%
$45
32
34
7.8
1,446
30%
1%
69%
1.03
5.7
A/A

1978
$2,467
112
$4.39
1.90
6.2%
$38
29
31
7.1
1,647
34%
1%
65%
1.03
4.7
A/A

INTERNATIONAL PAPER
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
$3,042
263
$5.95
1.75
5.6%
$56
32
36
6.1
2,207
33%
0%
67%
1.43
11.1
AA/Aa

1975
$3,081
218
$4.93
2.00
3.5%
$62
35
58
11.8
2,801
41%
0%
59%
1.43
5.4
AA/Aa

1976
$3,541
254
$5.60
2.00
2.9%
$80
58
69
12.3
3,093
34%
0%
66%
1.43
5.1
AA/Aa

1977
$3,669
234
$4.98
2.00
4.6%
$70
39
44
8.8
3,303
32%
0%
68%
1.43
4.7
AA/Aa

1978
$4,150
234
$4.94
2.00
5.5%
$49
35
37
7.5
3,407
28%
0%
72%
1.43
5.3
AA/Aa

Page 4

MEAD CORPORATION
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
1975
245125103.xls.ms_office
$1,526
$1,245
82
53
$3.27
$2.05
0.60
0.80
9.2%
6.6%
$13
$13
8
9
9
12
2.8
5.9
826
880
34%
35%
6%
6%
60%
59%
2.16
2.16
4.6
2.9
A/A
A/A

1976
$1,599
89
$3.61
0.89
4.4%
$23
12
21
5.8
965
33%
5%
62%
2.16
4.5
A/A

1977
$1,822
98
$4.10
0.98
4.7%
$24
18
22
5.4
1,071
38%
4%
58%
2.16
4.7
A/A

1978
$2,322
121
$5.12
1.21
6.8%
$34
17
23
4.5
1,171
36%
1%
63%
2.16
5.3
A/A

KIMBERLY-CLARK
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
$1,439
95
$4.10
1.48
6.5%
$35
19
25
6.1
1,030
24%
0%
76%
0.99
9.1
AA/Aa

1975
$1,484
103
$4.41
1.60
4.4%
$37
24
37
8.4
1,086
21%
0%
79%
0.99
8.3
AA/Aa

1976
$1,585
121
$5.21
1.80
4.1%
$47
36
44
8.4
1,196
20%
0%
80%
0.99
10.0
AA/Aa

1977
$1,726
131
$5.60
2.20
5.1%
$48
37
43
7.7
1,347
20%
0%
80%
0.99
10.1
AA/Aa

1978
$1,911
149
$6.36
2.60
6.4%
$50
39
41
6.4
1,435
19%
0%
81%
0.99
10.5
AA/Aa

ST. REGIS PAPER

Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
$1,471
105
$4.76
1.25
7.3%
$37
18
19
4.0
1,127
33%
0%
67%
1.14
7.6
NR/NR

1975
$1,395
96
$4.27
1.43
4.5%
$35
20
34
8.0
1,189
29%
0%
71%
1.14
7.2
NR/NR

1976
$1,642
91
$3.82
1.55
4.2%
$31
34
39
10.2
1,296
26%
0%
74%
1.14
6.1
NR/NR

1977
$1,996
107
$3.36
1.66
5.6%
$39
29
31
9.2
1,694
31%
0%
69%
1.14
5.6
NR/NR

1978
$2,300
127
$3.94
1.74
6.4%
$35
26
28
7.1
1,791
30%
0%
70%
1.14
5.9
NR/NR

(a) Equal to earnings before interest and taxes divided by interest

expenses.
(b) Standard & Poor's rating/Moody's rating.

Page 5

EXHIBIT 5 - Financial Statements

PENNWALT
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

245125103.xls.ms_office
1974
1975
$641
$714
27
33
$2.81
$3.25
1.24
1.36
7.4%
4.6%
$26
$30
15
17
17
28
6.0
8.6
371
441
28%
34%
0%
0%
72%
66%
1.33
1.33
2.9
3.3
A/A
A/A

KERR-MCGEE
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
$1,550
116
$4.64
0.85
1.4%
$93
47
72
15.5
851
19%
0%
81%
1.06
19.4
AA/Aa
1974
$859
70
$3.59
0.57
1.9%
$41
21
39
10.9
577
42%
10%
48%
0.81
5.5
NR/A

INT'L MINERALS/CHEMICALS
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1976
$777
35
$3.56
1.54
4.9%
$38
27
33
9.3
469
33%
0%
67%
1.33
3.8
A/A

1977
$835
42
$4.23
2.25
5.2%
$39
32
39
9.2
500
34%
0%
66%
1.33
4.1
A/A

1978
$921
45
$4.54
2.05
6.7%
$43
32
33
7.3
524
31%
0%
69%
1.33
4.2
A/A

1975
$1,799
131
$5.15
1.00
1.4%
$95
60
70
13.6
1,091
20%
0%
80%
1.06
17.1
AA/Aa

1976
$1,955
134
$5.19
1.19
1.8%
$83
61
68
13.1
1,325
24%
0%
76%
1.06
10.8
AA/Aa

1977
$2,165
119
$4.61
1.25
2.7%
$75
45
47
10.2
1,433
21%
0%
79%
1.06
8.4
AA/Aa

1978
$2,072
118
$4.57
1.25
2.6%
$53
40
48
10.5
1,533
17%
0%
83%
1.06
6.4
AA/Aa

1975
$1,303
166
$9.91
1.38
5.3%
$49
31
38
3.8
781
38%
4%
58%
0.81
11.6
NR/A

1976
$1,260
135
$7.73
2.10
5.9%
$42
33
41
5.3
990
37%
2%
61%
0.81
8.4
NR/A

1977
$1,280
108
$6.09
2.45
6.4%
$44
35
41
6.7
1,083
36%
1%
63%
0.81
5.5
NR/A

1978
$1,364
120
$6.61
2.60
7.4%
$44
34
35
5.3
1,161
32%
1%
67%
0.81
6.3
NR/A

Page 6

GEORGIA-PACIFIC
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (%)
Common stock - high ($)
Common stock - low ($)
Common stock - close ($)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta
Interest coverage (a)
Bond rating (b)

1974
1975
245125103.xls.ms_office
$2,432
$2,359
164
148
$1.74
$1.54
0.47
0.49
3.1%
1.9%
$27
$30
13
16
15
26
8.6
16.9
1,935
2,150
45%
42%
0%
0%
55%
58%
1.50
1.50
4.3
4.4
AA/Aa
AA/Aa

1976
$3,038
215
$2.12
0.70
2.1%
$37
26
37
17.4
2,045
22%
0%
78%
1.50
8.1
AA/Aa

1977
$3,675
262
$2.54
0.83
3.5%
$37
25
28
11.0
2,541
29%
0%
71%
1.50
9.9
AA/Aa

1978
$4,403
302
$2.93
1.03
4.5%
$33
24
24
8.2
2,878
29%
0%
71%
1.50
9.3
AA/Aa

BRUNSWICK CHEMICAL
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (c)
Common stock - high (c)
Common stock - low (c)
Common stock - close (c)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta (c)
Interest coverage (a)
Bond rating (b)

1974
$1.90
0.20
0.40
0.10
#N/A
#N/A
#N/A
#N/A
#N/A
2
33%
0%
67%
#N/A
6.7
#N/A

1975
$2.10
0.15
0.30
0.10
#N/A
#N/A
#N/A
#N/A
#N/A
2
30%
0%
70%
#N/A
5.0
#N/A

1976
$3.00
0.37
0.74
0.15
#N/A
#N/A
#N/A
#N/A
#N/A
2
25%
0%
75%
#N/A
12.3
#N/A

1977
$4.00
0.71
1.42
0.35
2.9%
$13
8
12
8.5
3
19%
0%
81%
1.10
47.0
#N/A

1978
$4.30
0.79
1.58
0.40
3.5%
$14
9
12
7.3
3
15%
0%
85%
1.10
53.0
#N/A

SOUTHERN CHEMICALS
Sales ($ millions)
Net income ($ millions)
Earnings per share ($)
Dividends per share ($)
Dividend yield (c)
Common stock - high (c)
Common stock - low (c)
Common stock - close (c)
Closing P/E
Total capitalization
% debt
% preferred stock
% common stock
Beta (c)
Interest coverage (a)
Bond rating (b)

1974
$1.70
0.10
0.61
0.00
#N/A
#N/A
#N/A
#N/A
#N/A
2
50%
0%
50%
#N/A
3.5
#N/A

1975
$2.00
(0.05)
(0.24)
0.00
#N/A
#N/A
#N/A
#N/A
#N/A
2
50%
0%
50%
#N/A
0.4
#N/A

1976
$2.70
0.28
1.38
0.00
#N/A
#N/A
#N/A
#N/A
#N/A
2
41%
0%
59%
#N/A
9.0
#N/A

1977
$3.60
0.74
3.69
0.30
1.2%
$28
11
25
6.7
2
28%
0%
72%
1.20
22.0
#N/A

1978
$3.90
0.73
3.66
0.30
1.3%
$31
20
23
6.4
3
21%
0%
79%
1.20
24.0
#N/A

(a) Equal to earnings before interest and taxes divided by interest expense.
(b) Standard & Poor's rating/Moody's rating.
(c) Stock not publicly traded.

Page 7

EXHIBIT 6

Financial Statements of the

Collinsville Plant (000's)
245125103.xls.ms_office
------ For years ended December 31 -----1974
1975
1976

REVENUES
Sales - tons
Avg. price/ton
Sales - $000

1977

1978

(a)
1979

36,899
188
6,937

30,819
243
7,489

37,464
295
11,052

40,076
367
14,708

39,790
392
15,598

38,507
413
15,903

VARIABLE COSTS
Power
Graphite
Salt & other
TOTAL

2,935
354
693
$3,982

3,395
369
800
$4,564

4,631
545
1,047
$6,223

5,530
653
1,274
$7,457

6,173
689
1,307
$8,169

6,759
714
1,385
$8,858

FIXED COSTS
Labor
Maintenance
Other
TOTAL
MFG COSTS

590
143
474
$1,207
$5,189

608
201
659
$1,468
$6,032

646
220
902
$1,768
$7,991

739
272
1,063
$2,074
$9,531

924
235
509
$1,668
$9,837

1,072
237
1,107
$2,416
$11,274

433
114
105
652
$1,096

394
92
154
640
$817

402
126
207
735
$2,326

391
155
274
820
$4,357

384
181
351
916
$4,845

399
204
429
1,032
$3,597

MANUFACTURING COSTS:

OTHER CHARGES
Depreciation
Selling
R&D
TOTAL
OPER. PROFIT
(a) Expected
EXHIBIT 6

Balance Sheet of Collinsville Plant (000's)

------ For years ended December 31 -----1974
1975
1976

ASSETS
Accts. recvbl.
Inventories
Net PP&E
TOTAL ASSETS
LIABILITIES
Accts. payable
NET ASSETS
(a) Expected

1977

1978

(a)
1979

701
254
4,066
$5,021

779
544
3,978
$5,301

1,128
681
4,003
$5,812

1,456
647
3,853
$5,956

1,575
639
3,964
$6,178

1,622
651
4,014
$6,287

402
$4,619

472
$4,829

619
$5,193

780
$5,176

795
$5,383

873
$5,414

Page 8

245125103.xls.ms_office
EXHIBIT 6
(cont.)
% OF SALES
Power costs
Variable costs
Fixed costs
Mfg. costs
Oper. profit

Percent of Sales Ratios

1974
42.3%
57.4%
17.4%
74.8%
15.8%

1975
45.3%
60.9%
19.6%
80.5%
10.9%

1976
41.9%
56.3%
16.0%
72.3%
21.0%

1977
37.6%
50.7%
14.1%
64.8%
29.6%

1978
39.6%
52.4%
10.7%
63.1%
31.1%

(a)
1979
42.5%
55.7%
15.2%
70.9%
22.6%

Accts rec.
Inventories
Accts. payable
Net assets

10.1%
3.7%
5.8%
66.6%

10.4%
7.3%
6.3%
64.5%

10.2%
6.2%
5.6%
47.0%

9.9%
4.4%
5.3%
35.2%

10.1%
4.1%
5.1%
34.5%

10.2%
4.1%
5.5%
34.0%

Operating profit/
net assets

23.7%

16.9%

44.8%

84.2%

90.0%

66.4%

(a) Expected

Page 9

245125103.xls.ms_office

EXHIBIT 7

Financial Statement of Dixon Corporation (000's)

Sales
Cost of goods sold
Selling and admin.
Research
Interest
Taxes
PROFIT AFTER TAXES
Earnings per share
Dividends per share

-- For years ended December 31 -1975

1976
$19,128
$23,830
14,085
16,889
1,952
2,308
325
388
400
320
1,125
1,878
$1,241
$2,047

1977
$28,348
19,950
2,824
593
240
2,285
$2,456

1978
$34,770
24,467
3,291
682
160
2,932
$3,238

(a)
1979
$42,259
29,185
4,436
716
80
3,818
$4,024

$1.13
$0.20

$1.86
$0.30

$2.23
$0.40

$2.94
$0.40

$3.66
$0.50

Cash & marketable sec.

Other current assets
PP&E
TOTAL ASSETS

$385
4,208
7,436
$12,029

$357
5,016
7,895
$13,268

$556
5,939
8,354
$14,849

$1,273
7,267
8,842
$17,382

$2,996
8,917
8,918
$20,831

Current liabilities
Debt (incl. curr. matu.)
Stockholders equity
TOTAL LIABILITIES

$2,314
5,000
4,715
$12,029

$2,836
4,000
6,432
$13,268

$3,402
3,000
8,447
$14,849

$4,138
2,000
11,244
$17,382

$5,113
1,000
14,718
$20,831

$7
$14
$9

$8
$22
$20

$19
$30
$27

$25
$40
$38

$35
$45
$40

1.06

1.06
#N/A

1.06
#N/A

1.06
#N/A

1.06
#N/A

Stock price - low

- high
- close (b)
Beta
Bond rating

#N/A

(a) Expected.
(b) 1979 value as of 10/30/79

Page 10

245125103.xls.ms_office

EXHIBIT 8

Pro Forma Financial Statements of the Collinsville

Plant (a) (000's)
----- For years ended December 31 ----1980
1981
1982

REVENUES
Sales - tons
Avg. price/ton
Sales - $000

1983

1984

$32,000
415
13,280

$35,000
480
16,800

$38,000
520
19,760

$38,000
562
21,356

$38,000
606
23,028

6,304
645
1,285
$8,234

7,735
791
1,621
$10,147

9,386
875
1,753
$12,014

10,526
940
1,836
$13,302

11,780
992
1,956
$14,728

1,180
256
1,154
$2,590
$10,824

1,297
277
1,148
$2,722
$12,869

1,427
299
1,179
$2,905
$14,919

1,580
322
1,113
$3,015
$16,317

1,738
354
1,153
$3,245
$17,973

112
451
1,060
$1,623
$833

125
478
1,110
$1,713
$2,218

138
508
1,160
$1,806
$3,035

152
543
1,210
$1,905
$3,134

168
591
1,270
$2,029
$3,026

MANUFACTURING COSTS:
VARIABLE COSTS
Power
Graphite
Salt & other
TOTAL
FIXED COSTS
Labor
Maintenance
Other
TOTAL
TOTAL MFG COSTS
OTHER CHARGES
Selling
R&D
Depreciation
TOTAL
OPER. PROFIT

Page 11

245125103.xls.ms_office

EXHIBIT 8
(cont.)

Pro Forma Financial Statements of the Collinsville

Plant as of December 31 (a) (000's)
Expected
1979

1980

1981

1982

1983

1984

ASSETS
Accts. rec.
Inventories
Net PP&E
TOTAL ASSETS

1,622
651
10,600
$12,873

1,328
598
10,025
$11,951

1,680
756
9,440
$11,876

1,976
889
8,840
$11,705

2,136
961
8,230
$11,327

2,303
1,036
7,560
$10,899

LIABILITIES
Accts. payable
NET ASSETS

873
$12,000

730
$11,221

924
$10,952

1,087
$10,618

1,175
$10,152

1,267
$9,632

EXHIBIT 8

Percent of Sales Ratios

1980

1981

1982

1983

1984

% OF SALES
Power costs
Variable costs
Fixed costs
Mfg. costs
Oper. profit

47.5%
62.0%
19.5%
81.5%
6.3%

46.0%
60.4%
16.2%
76.6%
13.2%

47.5%
60.8%
14.7%
75.5%
15.4%

49.3%
62.3%
14.1%
76.4%
14.7%

51.2%
64.0%
14.1%
78.0%
13.1%

Accts rec.
Inventories
Accts. payable
Net assets

10.0%
4.5%
5.5%
84.5%

10.0%
4.5%
5.5%
65.2%

10.0%
4.5%
5.5%
53.7%

10.0%
4.5%
5.5%
47.5%

10.0%
4.5%
5.5%
41.8%

7.4%

20.3%

28.6%

30.9%

31.4%

Operating profit/
net assets

(a) These pro forma financial statements were based on the following
assumptions:
(1) Continued use of unlaminated graphite electrodes.
(2) Though excess industry capacity would hold price
increases to less than an 8% annual rate in 1980, by
1984 the average annual price increase over the
period 1979-1984 was assumed to equal 8%.
(3) Power costs per KWH would increase 12 percent per year.
(4) Depreciation would increase because Dixon would
have written-up the value of the Collinsville plant
to $10.6 million.

Page 12