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As of the same date, current assets, including cash of $1,222,011, totalled $19,737,781, and current liabilities, including the $6,000,000 V-Loan, were $14,629,396. In September 1957, the claim for relief against the United States Government for costs incurred (during the years ended October 31, 1954 and 1955) on a defense contract in excess of contract amount was denied by the Air Material Command of the United States Air Force. The Corporation further questioned the equity of this decision, but the claim was again denied; therefore, the claim of $2,210,483 less applicable Federal income tax adjustments of 1,138,431 (including $417,129 for the year ended October 31, 1957) has been written off against earnings retained for use in the business. While CONTINENTAL AVIATION still is in a rather restricted financial position, its present working capital, together with the current sizeable earnings, would appear entirely adequate for its present volume of business, and no new financing is contemplated at this time. SELECTED INCOME ACCOUNT DATA Years Ended October 31 (000 omitted) 1957 1956 1955 1954 1953 -------- ------- ------ ------- ------ Net Sales 37,664 20,802 16,904 11,336 14,524 Cost of Products Sold 33,819 19,169 15,725 10,269 13,346 Administrative & General Expense 1,435 981 712 395 261 Depreciation and Amortization 158 163 163 106 101** Interest Expense 463 395 186 95 60 ------- ------- ------ ------- ------- Net Earnings before Taxes $ 1788 $ 92 $ 116 $ 471 $ 755 Federal Incomes Taxes*** 891 85 60 235 430 ------- ------ ------- -------- ------- Net Earnings $ 897 $ 7 $ 56 $ 236 $ 325 Adjustment Regarding Claim Write-Off --- --- (1,327) (162) --- Net Earnings after Adjustments $897 $7 $(1,271) $74 $325 Earned per Share $1.69 $0.01 $(2.40) $0.14 $0.61 * The years 1954 and 1955 reflect the adjustment resulting from the write-off of the claim against the United States Government. ** Including $44,673 of amortization of development of engines, and patents, which was not an allowable deduction for tax purposes. *** Includes deferred income taxes, applicable to excess of depreciation permitted for tax purposes over normal depreciation. of $36,000 in 1957, $42,000 in 1956, $40,000 in 1955 and $27,000 in 1954. NO RESTRICTIONS ON REPRODUCTIONS Additional copies available without charge on request to the following De Witt Conklin Organization offices: 120 Broadway New York 5, N. Y. WOrth 4-6056 Bank of America Bldg. Los Angeles 14, Calif. TRinity 1295 1622 Kirby Building Dallas 1, Texas RIverside 2-3523 Russ Building San Francisco 4, Calif. YUkon 6-2842