Sonoco

Sonoco Products needs to be reminded that "less is more." Confusion exists over its theme -- is it "Vision 2000" or "A passion for growth"? Besides, the letter to shareholders runs six pages long, and it's unmercifully interrupted more than a dozen times with various graphic gimmicks. If I were the CEO, I'd have somebody's head.

Vorwerk ICN

Vorwerk is a German company. Cover of its report may lack excitement, but inside pages are a riot. Always unique, this year's book contains everything from a telephone ring (if one knows to pry apart a gatefold cover) to die-cuts galore, sepia photographs and type that properly overlaps the line below it -- to indicate the garbled nature of verbal communications. A favorite is its page entitled "How to lie with statistics" (speaking of which: ICN Pharmaceuticals honorably says its four up front graphs are "not to scale."), showing how companies can fudge the facts depending on how they're graphed. Speaking of fudging: "Overall, 1995 was a disappointing year," the reader was told, sales increasing only 2%. Its profit picture? So well disguised it's impossible to determine if, as suspected, earnings are off year to year.

Bausch & Lomb

Bausch & Lomb's report is a contender as year's best designed. Especially commendable is its declaration that "We know that earnings are only one measure of financial progress."

Transamerica

Transamerica had the world's best annual a decade ago. This year, while its score is sufficient to give it "world-class" status -- that is, scoring at least 100 of a potential 135 points (116, to be precise) -- it didn't finish among the year's 10 best. No glossary of terms, percentage-change column with the financial highlights listing, no action-oriented index. Looks 10, though.

Texaco

The Texaco report likewise is attractive, and its theme ("Growing value and winning customers") is commendable, if insufficiently supported. And it's dishonest by my standards. Revenues may have risen, but net -- continuing operations or no -- is off. To $2.10 per share from $3.17, which fact one must unearth in the back-of-the-book income statement. Not nice.

Pioneer-Standard Electronics

A perhaps-understandable bit of braggadocio occurred in the Pioneer-Standard Electronics report. CEO James L. Bayman, chairman and president, told stockholders "Net income reached an all-time high." Of $1.09 a share, precisely the same as a year earlier! Net income rose all of $243,000 year to year. Every little bit counts.

True North Communications

If you want sizzle, you'll love the True North Communications book, high on flash, low on substance, which essentially is confined to a one-color financial statement printed on proxy-like paper and stuck (as an apparent afterthought) behind the high-gloss pages reflecting its advertising successes.

IES Industries

Year's most ill-chosen theme? IES Industries understandably was in shock after a year that saw "a devastating rate case decision" by the state utilities board: It denied a request for a rate increase AND, at the same time, ordered a rate reduction of $14.4 million. Report theme is seven unrelated words: Customers. Teamwork. Individuals. Ethical. Decisive. Innovative. Quality. Try adding, guys, Ill-Advised.

SBC Communications

SBC Communications may have fallen from its Top 10 perch, but its 105 points (a 22-point drop year to year) still qualify it for "world-class" status.

Armco

Armco, the Pittsburgh-based steel company, has produced perhaps the year's best magazine-appearing annual report. Its 127 points put it, as of now, in fourth place among the year's best annuals worldwide. One in four reports for 1995 has a magazine look.

Ciba

Ciba, the Switzerland-based biological and chemical group, could be excused for producing a Summary Annual Report, since it's not a U.S. company. To a degree, it sends an annual out of the goodness of its heart. At least it's upstanding in (1) identifying the document as incomplete and (2) noting, if on the last page, that the annual report "consists of two parts." The second one, a "financial review," wasn't included. Finally, say what you will about companies that take the SAR route, Ciba admits it has prepared "additional information that gives a more detailed insight into other aspects of our operations." To date, 3.6% of 1995 reports are summary documents. Two dozen corporations here and abroad have gone that down-and-dirty route.

Sequent Computer Systems

What to do when you've messed up on your annual report layout -- when you find yourself with a page or more and nothing to fill it? Sequent Computer Systems handled it thusly: It designated its Pg. 54 for "Notes," a sure sign of rank amateurs.

Winthrop Resources Corporation

It qualifies as attractive, but the Winthrop Resources Corporation annual report (that's what's proclaimed on the back cover; it's "Winthrop Financial Services" on the front) is year's smallest. 10 1/2 by 5 3/4. Its 32 tiny pages, plus a tissue-paper gatefold, qualified as attractive. Its positive/negative rating? Decidedly the latter: -30.6%.

Great Lakes Chemical

Great Lakes Chemical failed to declare a theme on cover of its inviting report. Nice cover photo, though -- of grade-school students (copies of the Wall Street Journal in hand) trying to get the teacher's attention so they can answer a question.

Home Shopping Network

At least Home Shopping Network didn't produce its 1995 annual report on proxy-like paper stock out of ignorance, or because it doesn't appreciate the benefit of a report to the producing corporation. HSN's report this year is nothing more than a Form 10-K, the legalistic version filed with the SEC and comprising one in 13 reports to shareholders this year. (More, one in 12, went that route a year earlier.) What's significant is this message on the cover of its humble document. To wit: "This report is being printed on the lowest cost paper obtainable. Management felt that this was appropriate given this year's dismal performance. Our hope is that next year this report will glow with color, graphics and expansive statements about the future of your company, supported by results from calendar 1996. Meanwhile, there is work to be done." Bravo, HSN!

HEPCOE

HEPCOE isn't publicly held, but the Toronto-based credit union's annual report warrants lavish praise, regardless. For its catchy theme, "Growing stronger," declaration up front of its mission and values, lively photographs of officers and other employees...and, not least, an interview, running over four pages, with Alan Marentette. The CEO responded to "excerpts from a telephone survey" -- "some of the most often-asked questions by members," enlivened with thumbnail photos.

Augat

If the purpose of an annual report is to educate readers about what the company does, for instance, Augat fails miserably, which is reflected by a negative (-30.6%) evaluation. But at least it's honest: "1995 results were lower than last year," its CEO, William R. Fenoglio, wrote. "We are not pleased with that..." Oh, yes, and the virtually obligatory, "...but we have reasons to be optimistic about 1996 and the future." The following day's mail carried word of the CEO's replacement, interestingly enough.

Perini

Speaking of honesty: Take the Perini report, please. It, too, has a negative evaluation (-19.4%), and looks are, well, decidedly wanting. But the man whose name's on the door confessed at the outset, "The company's performance in 1995 was very poor and a tremendous disappointment to us. We did not reach our financial goals nor achieve the profitability we expected." He thus joined the nine in 10 CEOs currently adjudged honest in their annual reports, a record high.

Southern Co.

The Southern Co. annual report appears destined to end up among the world's 10 best, its score 122 (of a potential 135) points, its positive elements abounding. It exhibits evident self-pride, its focus the individual employee. Southern's moving letter to shareholders believably is writen by CEO A. W. (Bill) Dahlberg. A standout, this.

Chevron

Chevron's 1986 annual report finished a dismal 23rd best worldwide. Each of the succeeding nine years, reports of the diversified, California-based oil/petroleum company have finished among the creme de la creme. This year's report, its score at least 125 points (one more point being debated) of a potential 135, contains many features. Not least: its eight strategies for the future. A gem, this, aspiring (already) to make it 10 straight with its '96 outing. But as of now, No. 5 on the year.

Herring Design

If you aren't acquainted with Houston-based Herring Design, you're being deprived of a treat: receiving Jerry Herring's periodic print pieces (his Herring Design Quarterly) elaborate with color photography and glowing with reminiscences, most recently, of his Uncle Red. Guaranteed moving and creative -- and revelatory of the artist's inate abilities. They're immense.

Coca-Cola Amatil

Australia-headquartered Coca-Cola Amatil produced one of the better non-North American annual reports. It's exciting graphically. More important, the document demanded readership through use of such devices as cover type ("Ingredients of success") to convert the recipient to reader, and an action-oriented contents listing. Restraining it from "world-class" status (those reports scoring at least 100 of a potential 135 points): excessive words per sentence (24 average) and use of complex words (seven) in the first 100 words in the shareholder letter. That alone caused four points to be deducted. Two more were knocked off for its exclusion of women and minorities from the board of directors, all of whom are white males. Final score: a close-but-no-cigar 90 points.

H.J. Heinz Co.

Credit the H.J. Heinz Co. annual report as being No. 691 for 1995. In a Wall Street Journal advertisement, CEO Anthony J.F. O'Reilly promised to illuminate a company hip to "the mysterious art of making profits." One secret revealed: make the current year look even sweeter by encompassing 53 weeks, vs. 52 the two previous years. That aside, photo of O'Reilly is credited as showing the chairman alone (that is, without fellow-officers). He does, however, share the limelight with Sasha, his Saint Bernard. That's Tony on the left.

Cincinnati Bell

Credit Cincinnati Bell with running the year's greatest number of photographs of the boss -- six. One on the contents page, four on Pg. 1 of the jointly signed (with the chairman) letter to shareholders and, for bad measure, an additional one at end of the two-page missive. Thus qualifying John T. LaMacchia, president, for a SCRAMMS citation. That's an acronym for Sid Cato Rails Against the Mirror, Mirror Syndrome ("Who's the fairest of us all?" "You are, boss, you are!").

Caterpillar

Applaud Caterpillar, look of its annual report magnificent, its positive nature commendable. But its report is incomplete, its financials having been "condensed to make them more readable." Indeed, the report belatedly (on Pg. 29, nine from the end) is identified as a dreaded summary annual. Question is: What's omitted? A summary report too often leaves stockholders comparing apples and oranges; in other words, the Cat isn't on a level playing field with the 96 of 100 companies that present full disclosure. Kumquats, not kudos, for this performance. ("Would you buy a used piece of earth-moving equipment from this outfit?" No way.)

Warner-Lambert

Back to the drawing boards for the graphic designers of the Warner-Lambert report. Forget that the cover contains a mishmash of elements (as did the inside front cover), that identification of the company's five top execs isn't clear in a poorly posed photograph. (Is the president seated or standing? Your guess is as good as mine.) Not surprising is that the entire four-page shareholder letter was typeset in hard-to-read italics, discouraging at best. Perhaps most horrific are what look like meaningless swipes from a pencil appearing randomly throughout. That or a cat hair wafted, disconcertingly, onto the page. Whatever: Such silliness, such an indulgence by artists unwisely given their head.

WPP Group

If you wonder why advertising agencies do dumb things, a clue is provided by the WPP Group report. (It's J. Walter Thompson, among other entities.) Typifying the puzzling mindset extant are two elements: First, the contents listing is run on a tiny foldover that awaits the reader on opening the book. That's printed in black type on a white background. On the back side of that tiny flap is printed, on a silver background now, THE VERY SAME CONTENTS LISTING! As if that weren't enough, on Pg. 4 is the label, "Letter to share owners." Beneath that, in larger type: "Dear share owner." Duh. Who to blame? The back flap, not repeated on its backside, fortunately, says the book was "written and produced" by the company, designed by SampsonTyrrell Corporate Publications, London.

Toshiba

I'm at a loss concerning the Toshiba annual. The cover identifies it as being a 1996 (year ended March 31, 1996) report. Financial data likewise contrasts 1996 with 1995. But the executives: They say the company posted "higher earnings in fiscal 1995, the year that ended March 31, 1996." Maybe that's simply a typo. One hopes so.

Allegheny Ludlum Abbott Laboratories

Cato's mantra: It's not only the guy or gal who conceives of the bosses posing wearing hard hats who looks silly; most assuredly, so do the corporate chieftains. Case in point: Allegheny Ludlum recently exhibited such poor judgment in its annual report, its two top guys pictured looking decidedly ill at ease. Add to the list Abbott Laboratories. This is not the first time the pharmaceutical company's CEO, Duane L. Burnham, has donned hard hat for an annual report photo session. God knows what possesses him (other than a misguided communications wannabe) to agree to appear looking -- well, downright dopey. With his equally tiny white hat perched atop his head is his cohort, the president/chief operating officer, Thomas R. Hodgson. Oh, you silly savages!

Deb Shops

What gives? First, Toshiba can't decide if it's reporting on fiscal 1995 or fiscal '96 results. Now comes Deb Shops with a similar inability. Make up your minds, already! Cover of the Deb report identifies it as being for 1995. But it appears from the text, and the tabular listings, that the company is talking about fiscal '96. Some would say the two top execs can't be blamed, buffeted as they are by declining sales and back-to-back loss years (a loss of 33 cents a share, off 57% from the year-earlier loss of 21 cents). Meantime, assets, shareholder equity and book value per share all sunk to five-year lows. But enough's enough. This is the first time in the last dozen-plus years any company -- let alone two in the space of a fortnight -- has become confused over what year its report is for. If you can't get that straight, guys...gee.