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of the December 31, 1957, balance sheet would indicate that items ordinarily classified as current assests aggregate almost &75,000,000, including cash and equivalent of $21,561,000. At the same date, current liabilties amounted to $32,947,000, including bank loans of $9,510,000. The principal fixed asset used by MORRISON-KNUDSEN in its business is its construction equipment owned by a single company. This equipment pool had an original cost of over $36,000,000, of which $24,223,013 was invested during the past three years. The fact that the Company's principal capital investment is in mobile construction equipment, rather than in permanently located plants and machinery, accounts in large measure for its ability to expand rapidly its volume of work in process. These "flexible" units of contruction equipment used to earn gross revenues may be transferred readily upon completion of one construction contract to an entirely new job location where additional revenues will be earned. Outlook For 1958 The management of MORRISON-KNUDSEN believes that its prospects for the year 1958 are excellent. While the Company enters the year with a lower volume of contract business than a year ago, its backlog of $273,411,000 of domestic and foreign work, together with the new business it expects to book during the year, assures a very favorable level of activity. The public works field, particularly, should benefit from the efforts of the Government to counteract a general recessionary trend in business. In addition to the profits that may be anticipated from processing existing and prospective contracts, MORRISON-KNUDSEN stands to benefit materially from recoveries on its losses on St. Lawrence Seaway projects which were charged directly against income in the years 1956 and 1957. Any recoveries of these heavy losses will be credited directly into the income account. The management, of course, does not know at this time what its recoveries will be. It feels, however, that it has valid claims for additional compensation based on the performance of work which was in addition to or changed from that described in contract specifications. It also believes that eventual recoveries will be substantial. The confidence of the management in the business outlook for MORRISON-KNUDSEN was expressed in Mr. Morrison's Letter to the Stockholders in the 1957 annual report, in which he said, "...we propose to continue the 40-cent-quarterly dividend rate in 1958." Condensed Income Account Data Years Ended December 31 (000 omitted) [[6 Columned Table]] |---|[[underlined]]1953[[underlined]]|[[underlined]]1954[[underlined]]|[[underlined]]1955[[underlined]]|[[underlined]]1956[[underlined]]|[[underlined]]1957[[underlined]]| |Revenues from Operations|$127,642|$105,555|$135,582|$223,817|$203,865| |Cost of Revenues|120,176|97,944|127,644|210,490|188,405| |Gross Profit from Operations|$7,466|$7,611|$7,938|$13,327|$15,460| |Joint Venture Income (Loss)|3,728|3,864|2,931|(846)|1,604| |Operating Income|$11,194|$11,475|$10,869|$12,482|$17,064| |Adm. and Gen. Expenses|7,155|7,151|7,821|8,182|9,347| |Operating Profit|$4,039|$4,324|$3,048|$4,300|$7,717| |Foreign Dividends|3,065|3,107|2,124|2,150|1,751| |Other Income (Loss), Net|826|508|3,615|2,066|(48)| |Net Income before Income Taxes|$7,930|$7,939|$8,788|$8,515|$9,421| |Federal Income Taxes|2,094|2,279|2,519|2,714|3,800| |Net Income|$5,836|$5,660|$6,269|$5,801|$5,621| |Minority Interests|75|101|257|83|105| |Net Income to Surplus|$5,761|$5,559|$6,012|$5,718|$5,516| |Earned per Share*|$2.82|$2.72|$2.94|$2.80|$2.70| |Dividends per Share*|$1.14|$1.28|$1.43|$1.60|$1.60| *Based on present number of outstanding shares. No Restrictions on Reproduction Additional copies available without charge on request to the following De Witt Conklin Organization offices: [[4 Columned Tables]] |---|---|---|---| |120 Broadway|1622 Kirby Building|Bank of America Bldg.|Russ Building| |New York 5, N.Y.|Dallas 1, Texas|Los Angeles 14, Calif.|San Francisco 4, Calif.| |WOrth 4-6056|RIverside 2-3523|TRinity 1295|YUkon 6-2842| Litho'd in U.S.A.
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