Letter to the Shareholders of Bangor Punta Corporation (1968)
To Bangor Punta's Shareholders :
The operating policies and philosophies of today's multi-industry corporations differ sharply. But in 1968, nearly all diversified corporations—or conglomerates—were lumped together and then collectively criticized.
We think Bangor Punta is distinctive—and perhaps exceptional—among multi-industry companies for the following reasons:
- We have concentrated much of our expansion in two of the nation's most important growth industries—Leisure Time and Public Security—and these two operating groups contributed nearly two-thirds of our earnings in 1968.
- We are continuing to attract strong managerial talent at both the corporate and operational levels to cope with the complex technologies involved in managing and controlling a rapidly growing company.
- We believe our corporate purpose is to manage our material assets and our human resources to insure the best possible economic growth. These asset management goals were accomplished in 1968 through the expansion and development of our operating companies, through acquiring additional companies, and through the acquisition and financial services we provide for companies in which we own minority positions. We believe our asset management concept will continue to enhance our shareholders' investment.
- We are improving our leadership position in the area of meaningful financial reporting through the disclosure of profit contribution by operating groups and through relating these profits to our overall corporate performance. By disclosing historical sales of our operating groups, we are providing you with an appraisal of our performance over an extended period of time. In 1968, we accounted for all major acquisitions on a purchase basis.
Sales and revenues for fiscal 1968 totaled $258,895,000, an increase of 61% over last year's figure of $160,585,000. Earnings from operations amounted to $13,294,000 in 1968, or 61% more than the $8,271,000 earned in 1967. Net income rose 48% to $8,243,000 after inclusion of a $949,000 net gain from the disposition of assets. Net income in 1967 was $5,571,000.
Earnings per share were $2.61 in 1968, including the net gain of 29 cents per share from the disposition of assets, as compared with $2.41 in 1967. Earnings per share are reported on the average number of shares outstanding, assuming full conversion of our preference stocks and 6% convertible notes.
Among our principal acquisitions during the year were Waukesha Motor Company, which established our new Energy Systems group, and Metcalf & Eddy—the first in a planned group of Professional Service companies. We also completed several smaller acquisitions for our Leisure Time and Public Security groups and concluded the acquisition of Producers Cotton Oil Company.
A contract to merge Crosman Arms Company, Inc., into Bangor Punta has been signed and we expect to consummate the merger upon receipt of a favorable tax ruling from the Internal Revenue Service.
In December your Board of Directors declared a special distribution of a new twelve-year warrant to the shareholders of common stock. This special distribution provides a new tool for use in our acquisition and financial expansion program and also gives our common shareholders another security through which to participate in the continued growth of Bangor Punta. Convertible preference stock owners can avail themselves of this distribution by converting their holdings into common stock prior to January 31, 1969.
We are optimistic about the outlook for the future. Without further acquisitions, sales are expected to reach $350,000,000 in fiscal 1969. We look forward to improved performance in our Transportation and Fashion Fabrics groups and to further strong growth in our Leisure Time, Public Security and Professional Services groups. Our goal in terms of percentages for annual growth continues to be 25%: 15% from internal growth and 10% through financial expansion.
December 18, 1968
/s/ Nicolas M. Salgo
Chairman of the Board
/s/ W. Gordon Robertson
Chairman of the Executive Committee
/s/ David W. Wallace