Sending Out Signal to Future Investors
Poems, colorful Sgt. Pepperish-drawings and an income statement in big type and simple-to-read language.
Hardly the stuff of most corporations’ annual reports to shareholders--especially corporations with annual revenues topping $6 billion.
Nonetheless, the annual report of La Jolla-based The Signal Cos. is flush with these comic-book features.
But the report isn’t for shareholders.
It’s for youngsters.
The 18-page brochure is chock full of drawings and poems, but its message is serious and pointed.
The narrative, written by Signal public relations executive Wayne Hopkins, explains how the government taxes labor and business, details the tax system and highlights the downsides of relying on debt financing.
Make that a heavy emphasis on debt financing, with an especially fine-tuned attack on deficit spending.
Fairy tales, after all, are supposed to have a moral.
“Our top executives have a continuing interest in the economy and the deficit,” Hopkins said. “We’re interested in economic education.”
Indeed, both Signal Chairman Forrest N. Shumway and President Michael Dingman in 1982 served on the Grace Commission, also known as the President’s Private Sector Survey on Cost Control in the Federal Government.
Shumway and Dingman are both featured in Signal’s “Annual Report for Young People, 1984.” Rather than the up-close, coat-and-tie portrait that appears of Shumway and Dingman in the “regular” annual report, the young people’s version shows the executives in shirt sleeves shaking hands in front of an upright surfboard.
Shumway gave Dingman the surfboard when Dingman’s Wheelabrator-Frye merged with Signal in 1983. La Jolla, the report notes, is where “the surf is up after 5 o’clock.”
The reports were Dingman’s brainchild and his Wheelabrator-Frye produced similar young people’s reports for nine years. When Wheelabrator-Frye merged with the La Jolla-based high-technology and engineering company, the concept of a report for youngsters tagged along.
Signal’s financial statements have been condensed and simplified in the young people’s report. “This is what we received from customers for our products and services,” is the line that describes Signal’s $6 billion in revenue in 1984.
Nowhere is the word net income used. In fact, the reader needs to add the dividends paid to stockholders and “what was left as savings--money we can use to employ more people and make our company even bigger and better”--to derive Signal’s $285 million in 1984 profits.
Young readers also will get a scoop of sorts because one of the expenses lists nearly $2.2 billion in salaries paid to Signal’s 54,000 workers worldwide. It is the first time Signal has listed salary expenses, Hopkins said.
The reports cost about 39 cents each, compared to the $1 or so it costs Signal to produce its traditional annual report.
About 245,000 copies of the young people’s annual report were printed, Hopkins said--50,000 more than the press run of the “other” annual report.
The extras will be mailed to schools and educational institutions that request them, Hopkins said.
Although shareholders received the reports only last week, “We have a fair number of personal ‘thank-yous’ from shareholders, and that is unusual because we don’t (typically) get those,” he said.
Although the reports are aimed at students in the fifth, sixth and seventh grades, Signal has received requests for the publication from some unlikely sources.
Included are other businesses, accountants, stockbrokers--even a request from the Hardin-Simmons University School of Business in Abilene, Tex., which wants to use the reports in its accounting classes.
There seem to be only two other companies in the country that produce similar annual reports for young people.
Armstrong World Industries in Lancaster, Pa., has inserted an eight-page booklet for young people in its annual report for the last decade. They are distributed to colleges and high schools, according to Anna Stephans, spokeswoman for the interior furnishings manufacturing and marketing company.
Figgie International, a Richmond, Va.-based holding company, has produced a 24-page young people’s annual report since 1980, according to spokeswoman Jan Allen.
UC San Diego economics Prof. Mark Machina worked on the narrative with Hopkins, Los Angeles artist Gary Lund did the drawings, and the report was designed by Jeffries Assn. of Los Angeles.
