Television digest with AM-FM reports (Jan-Dec 1951)

15 Financial & Trade Notes: Admiral’s president Ross Siragusa x-eported this week (1) that company “has no completed TV sets in inventory at the factory level,” and (2) that “while Admiral has large untapped available bank credits, it is free of debt financing, none is contemplated, and the company has expanded its working capital to $25,700,000 compared with $21,900,000 in December while net worth has inci-eased to $35,900,000 for the same period.” To all Admiral dealers, Sii’agusa sent letter with first half 1951 financial figures, stating “Admiral’s financial health is in the best shape in its history,” cautioning them to consider financial responsibility of manufacturers from whom they get goods, forecasting “healthy i-esumption of TV buying in the fall.” Company resumed production this week after vacation period, gearing output to demand of distributors. Admiral sales fii'st 6 months of 1951 totaled $103,587,355, net profit after taxes $4,093,421 ($2.12 per share), as against $103,295,848 sales and $8,485,184 ($4.24) profit foxsame 1950 period. Second quarter sales were $33,265,807, net profit $1,690,078 (88^) vs. $57,004,439 sales and $4,326,755 profit ($2.16) same 1950 quarter. Most of second quarter earnings, it was reported, came from readjustment of tax reserves. Dx-op in volume is shared with whole TVradio industry, Siragusa blaming it on “general consumer apathy attributed to stringent govt, credit restrictions, 10% excise tax and coixfusion over color TV.” Govt, orders have increased, deliveries begun, expected to reach peak within 6 months so that “the $5,000,000 to $6,000,000 x'ate of delivery per month of govt, orders will compensate in Admiral activity for any decline in civilian business occasioned by material shortages.” * * * sp United Paramount Theatres Inc. reports consolidated earnings of $4,849,000 for first 6 months of 1951, including capital gains and company’s share of earnings of nonconsolidated subsidiax’ies. Earnings are equal to $1.49 per share, compare with $5,660,000 ($1.74) for first half 1950. Provision for Federal taxes for first half amounted to $3,256,000 vs. $2,445,000 same period last year. Quaid;er ended June 20 showed $2,058,000 earnings (66^) compared with $2,467,000 (93i^) for second quarter 1950. President Leonard Goldenson reported proxies on proposed UPT-ABC merger (Vol. 7:21,26,28) are overwhelmingly in favor. Through July 13, proxies from 12,319 stockholders representing 1,183,503 shares voted in favor of merger proposal and 75 holders representing 8474 shares opposed; thus, 36% of outstanding stock has been voted in favor, .03% against. V-loan credit of $50,000,000, plus additional unsecured credit line of $20,000,000 was arranged this week by Avco president Victor Emanuel, who stated they’re to finance defense contracts for “wide range of electronic equipment” along with tanks and aircraft engines and airframe components. It’s largest loan processed to date through New York Federal Reseirve Bank, participants being 14 banks headed by Bankers Trust. How higher taxes are biting into profits is illustrated in GE statement for first 6 months, showing all-time record sales of $1,184,735,000 and pre-tax profit of $212,326,000 — latter reduced by 139% tax increase to $70,326,000 ($2.44 per share) as against $77,445,000 ($2.68) same pex’iod 1950. June quarter sales were $615,047,000, net earnings $35,329,000 ($1.33). International Resistance Co. has purchased Hardy Instrument Co., Forest Hills & Long Island City, N. Y., makers of Microstak x-ectifiers, etc., will operate it henceforth under IRC specialty div., Philadelphia; president Nox-man Hardy and chief engineer Benj. Solow join IRC. Motorola sales for first half 1951 were approximately $72,000,000 compax-ed with $70,568,388 for same 1950 period. Second quarter sales slumped to $25,500,000 from $34,717,415 for second quarter 1950 due to falling off of TV demand. Forward buying of TV sets first quarter this year, says preliminary report, “borrowed” greatly from sales in first quarter. Said July 16 letter from president Paul Galvin to stockholders: “Assuming a Korean armistice and no world war, this is about the way the next six months appear in prospect. We do not expect to equal the dollar volume attained in the last six months of 1950, nor do we expect to show earnings equivalent to those of the same period of 1950. Volume reduction will be influenced greatly by controlled material govt, regulations which will limit our production of civilian goods. Car radio sales should parallel automobile sales which, in turn, will be curtailed by govt, regulations. TV sales, in addition to regulations limitations, will be influenced by the forward buying of the past year, as well as by the restriction of markets due to the [FCC] ‘freeze’ . . . Our home radio and communications sales, however, will probably remain about the same as in the last 6 months of 1950. Our govt, business will be very modex-ate for this period because military contracts for the most part x-equire lengthy preparation and tooling and, therefore, will not influence our billings to any substantial degree until 1952. “Net profits, in addition to being influenced by a lesser volume of business for the next 6 months, will be affected by the excess profits tax. Nevertheless, at this writing, we expect to earn a satisfactory profit for the year 1951.” ♦ ♦ ♦ ♦ Ofiicial Films Inc., Isaac D. Levy’s big films-for-TV project which recently absorbed Jerry Fairbanks Studios (Vol. 7:22,27), holds special stockholders xneeting Aug. 2 to change authorized capital from 1,000,000 shares of Class A common (10^ par), 1,000,000 Class B (10^) and 36,230 shares of B5(j: cumulative preferred ($5 par) to 2,000,000 shares of common — eliminating distinction between A & B. Preferred has already been x'edeemed. Board will also be increased to 12 members, says letter by president Aaron Katz accompanying notice signed by Emanuel Sacks (RCA v.p.) as secretary. Short interest in TV-radio and related stocks on New York Stock Exchange showed these changes between June 15 and July 13, NYSE reported this week: Admiral, 42,445 shares on June 15 to 37,405 on July 15; Avco, 19,680 to 20,280; CBS “A,” 12,283 to 3400; CBS “B,” 7489 to 1452; Emerson, 7368 to 5775; GE, 11,215 to 13,296; Magnavox, 20,757 to 17,373; Motorola, 16,487 to 17,373; Philco, 18,444 to 18,252; RCA, 25,223 to 29,986. Society of Motion Picture & Television Engineers won’t participate in fox'thcoming hearings on requests for theatre-TV frequencies (Vol. 6:2, 9; 7:17), president Peter Mole announced following June 20 boax-d meeting in New York. Pointing out that SMPTE is a technical organization not concerned with “commercial or industx-ial matters as such,” Mole said: “The Society is convinced that the matters under consideration at these hearings can be adequately . . . handled by the qualified engineering representatives of the motion picture organizations.” In letter to FCC, Society explained that its mission to coordinate vax’ious technical aspects of theatre TV has been accomplished, invited Commission and 8 motion picture organizations to “call upon it at any time” for answers to specific technical questions. Theatre-TV hearing, scheduled for Sept. 17, will probably be postponed because of crowded FCC calendar.