At a meeting of your Directors held on Tuesday, May 26, 1931, it was decided to omit the dividend which would normally be payable on June 15, 1931. The dividend was continued during 1930 at the full rate because the Company had a substantial earned surplus saved from the earnings of previous years which permitted such repayment without impairment of working capital beyond a point where, as business improved, the Company might need to borrow to meet increasing payrolls and purchases.

As stated in my letter of March 14, 1931, the depression lasting longer than anticipated warranted the reduction of the dividend to $0.325 per share on March 16, 1931. We then hoped that improving business would enable us to continue this rate, but while some improvement has occurred your Directors believe that the best interests of the Company and its shareholders are served by conserving our cash in every possible way until our business is more nearly normal.

The low point of our business up to this time was reached in January and the first part of February. About the 20th of February improvement set in and, although slow, has been gaining steadily to date. More orders were received in May than in any month since July 1930, hence unfilled orders on June 1, 1931 were higher than at any time since August 1, 1930.

The financial condition of the Company is excellent as you will see from the condensed balance sheet attached. Provision is made in the statement through reserves for all charges such as Depreciation, Taxes, etc., up to May 30, 1931.

During the depression we have developed some new machines and have improved our regular lines which will naturally extend our business because by the use of our new products, customers will be able to do more and better work than has heretofore been possible. Many economies and improvements have been made which should make a favorable showing as our operations increase.