<PAGE>
THIS DOCUMENT IS A CONFIRMING COPY OF AMENDMENT NO. 1 TO THE REPORT ON
FORM 8-K/A FILED ON DECEMBER 28, 1993.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K/A
AMENDMENT TO CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
_________________
OCTOBER 15, 1993
Date of Report (date of earliest event reported)
TOOTSIE ROLL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 1-1361 22 131 8955
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation or
organization)
7401 SOUTH CICERO AVENUE
CHICAGO, ILLINOIS 60629
(Address of principal executive offices, including Zip Code)
(312) 838-3400
Registrant's telephone number, including area code
Page 1 of 15
Sequentially Numbered Pages
Exhibit Index at page 4
<PAGE>
Item 7. Financial Statements, Pro Form Financial Information and Exhibits
(a) Financial statements of business acquired (the "Business").
(i) The balance sheets of the Business at December 31, 1992 and
October 15, 1993, and the related statements of operations and changes
in divisional equity and statements of cash flows for the year ended
December 31, 1992 and the period ended October 15, 1993, including the
notes thereto, together with the related Accountant's Report, attached
hereto as Exhibit 28(a), are hereby incorporated by reference.
(b) Pro forma financial information
(i) The unaudited pro forma income statements of Tootsie Roll
Industries, Inc. ("Tootsie Roll") and the Business for the year ended
December 31, 1992 and the nine months ended September 30, 1993, and
the unaudited pro forma condensed balance sheet of Tootsie Roll and
the Business as at September 30, 1993 attached hereto as Exhibit 28(b)
are hereby incorporated by reference.
(c) Exhibits
EXHIBIT NO. DESCRIPTION OF DOCUMENT
28(a) The balance sheets of the Business at
December 31, 1992 and October 15, 1993, and
the related statements of operations and
changes in divisional equity and statements
of cash flows for the year ended December 31,
1992 and the period ended October 15, 1993,
including the notes thereto, together with
the related Accountant's Report.
28(b) The unaudited pro forma income statements of
Tootsie Roll Industries, Inc. ("Tootsie
Roll") and the Business for the year ended
December 31, 1992 and the nine months ended
September 30, 1993 and the unaudited pro
forma condensed balance sheet of Tootsie Roll
and the Business as at September 30, 1993
attached hereto as Exhibit 28(b).
-2-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TOOTSIE ROLL INDUSTRIES, INC.
Dated: December 28, 1993 By: /s/ G. HOWARD EMBER, JR.
---------------------------------
G. Howard Ember, Jr.
Vice President, Finance
-3-
<PAGE>
Exhibit Index
Description of Sequential
Exhibit No. Document Page Nos.
- ----------- -------------- ----------
28(a) The balance sheets of the Business at
December 31, 1992 and October 15, 1993,
and the related statements of operations
and changes in divisional equity and
statements of cash flows for the year
ended December 31, 1992 and the period
ended October 15, 1993, including the
notes thereto, together with the related
Accountant's Report.
28(b) The unaudited pro forma income statements
of Tootsie Roll Industries, Inc.
("Tootsie Roll") and the Business for
the year ended December 31, 1992 and the
nine months ended September 30, 1993,
and the unaudited pro forma condensed
balance sheet of Tootsie Roll and the
Business as at September 30, 1993.
-4-
<PAGE>
EXHIBIT 28(a)
CAMBRIDGE BRANDS DIVISION
OF WARNER-LAMBERT COMPANY
FINANCIAL STATEMENTS
DECEMBER 31, 1992 AND
OCTOBER 15, 1993
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of Tootsie Roll Industries, Inc.
In our opinion, the accompanying balance sheets and the related statements of
operations and changes in divisional equity and of cash flows present fairly, in
all material respects, the financial position of Cambridge Brands Division (a
business unit of Warner-Lambert) at December 31, 1992 and October 15, 1993, and
the results of its operations and its cash flows for the year ended December 31,
1992 and the period ended October 15, 1993 in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Cambridge Brands Division is a member of a group of affiliated companies and, as
disclosed in Notes 1 and 4 to the financial statements, has extensive
transactions and relationships with members of the group. Because of these
relationships, it is possible that the terms of these transactions are not the
same as those that would result from transactions among wholly unrelated
parties.
PRICE WATERHOUSE
Chicago, Illinois
December 10, 1993
<PAGE>
CAMBRIDGE BRANDS DIVISION
OF WARNER-LAMBERT COMPANY
BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
December 31, October 15,
1992 1993
---- ----
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 67 $ 61
Accounts receivable trade, net of
allowance 2,635 7,083
Inventories 2,021 2,074
Prepaid expenses and deferred charges 751 864
------- -------
Total current assets 5,474 10,082
------- -------
Property, Plant and Equipment:
Buildings and improvements 5,129 5,468
Machinery and equipment 13,748 14,140
------- -------
18,877 19,608
Less - accumulated depreciation (5,782) (6,778)
Land 2,475 2,475
------- -------
Total property, plant and equipment 15,570 15,305
------- -------
Intangible assets, net of accumulated
amortization of $13,229 and $14,397 49,320 48,152
------- -------
Total Assets $70,364 $73,539
------- -------
------- -------
LIABILITIES AND DIVISIONAL EQUITY
Current liabilities:
Accounts payable $ 599 $ 587
Accrued salary and wages 463 481
Other accrued expenses 1,098 1,401
------- -------
Total current liabilities 2,160 2,469
------- -------
Divisional equity 68,204 71,070
------- -------
Total Liabilities and Divisional Equity $70,364 $73,539
------- -------
------- -------
</TABLE>
The accompanying notes are an integral part of this statement.
-2-
<PAGE>
CAMBRIDGE BRANDS DIVISION
OF WARNER-LAMBERT COMPANY
STATEMENTS OF OPERATIONS
AND CHANGES IN DIVISIONAL EQUITY
(dollars in thousands)
<TABLE>
<CAPTION>
For the year For the
ended period ended
December 31, 1992 October 15, 1993
----------------- ----------------
<S> <C> <C>
Gross sales $60,560 $48,562
Less - discounts and returns 2,408 1,571
------- -------
Net sales 58,152 46,991
Cost of goods sold 31,093 22,959
------- -------
Gross profit 27,059 24,032
------- -------
Operating expenses:
Distribution 3,054 2,478
Selling, advertising and
promotion 16,261 14,016
Administrative 1,986 1,861
Amortization of intangible assets 1,402 1,169
------- -------
Total operating expenses 22,703 19,524
------- -------
Income before income taxes 4,356 4,508
Income tax provision 2,217 2,236
------- -------
Net income 2,139 2,272
Net transfers (to) from Warner-Lambert (4,311) 594
Divisional Equity at beginning of period 70,376 68,204
------- -------
Divisional Equity at end of period $68,204 $71,070
------- -------
------- -------
</TABLE>
The accompanying notes are an integral part of this statement.
-3-
<PAGE>
CAMBRIDGE BRANDS DIVISION
OF WARNER-LAMBERT COMPANY
STATEMENTS OF CASH FLOWS
(dollars in thousands)
<TABLE>
<CAPTION>
For the year For the
ended period ended
December 31, 1992 October 15, 1993
----------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 2,139 $ 2,272
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization 2,887 2,163
------- -------
5,026 4,435
Changes in operating assets and liabilities:
Accounts receivable (567) (4,448)
Prepaid expenses (61) (53)
Inventories 1,344 (113)
Accounts payable (665) (12)
Accrued expenses 283 321
------- -------
Net cash from operating activities 5,360 130
------- -------
Cash flows from financing activities:
Net transfers (to) from Warner-Lambert (4,311) 594
------- -------
Net cash (used by) from financing activities (4,311) 594
------- -------
Cash flows from investing activities:
Purchase of property, plant and equipment (1,052) (730)
------- -------
Net cash used by investing activities (1,052) (730)
------- -------
Net decrease in cash (3) (6)
Cash at beginning of period 70 67
------- -------
Cash at end of period $ 67 $ 61
------- -------
------- -------
</TABLE>
The accompanying notes are an integral part of this statement.
-4-
<PAGE>
CAMBRIDGE BRANDS DIVISION
OF WARNER-LAMBERT COMPANY
NOTES TO FINANCIAL STATEMENTS
(dollars in thousands)
NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION
In October 1993, Tootsie Roll Industries, Inc. entered into an agreement to
purchase certain assets of the Cambridge Brands Division (the Division), a
business unit of Warner-Lambert Company (the Company). The Division, which
operates a production facility located in Cambridge, Massachusetts, manufactures
and markets confectionery products under the brand names Junior Mints, Sugar
Daddies, Sugar Babies, Pom-Poms and Charleston Chews.
The accompanying financial statements reflect the financial position and results
of operations of the Division as if the Division had been operating as a
separate company. The assets, liabilities and results of operations
specifically related to the Division have been included in the financial
statements. Certain corporate, general and administrative expenses of Warner-
Lambert have been allocated to the Division (discussed in Note 4) on a basis,
which in the opinion of management, is reasonable. However, such expenses are
not necessarily indicative of, and it is not practical for management to
estimate the level of, expenses which might have been incurred had the Division
been operating as a separate company.
REVENUE RECOGNITION
Revenue is recognized upon shipment of product. The Division recognizes
estimated discounts and product returns at the time of sale.
INVENTORIES
Inventories are recorded at the lower of cost or market using the first-in,
first-out (FIFO) method.
PREPAID EXPENSES AND DEFERRED CHARGES
Prepaid expenses and deferred charges consist primarily of spare parts for the
maintenance of production machinery. These are valued at cost and expensed when
utilized.
-5-
<PAGE>
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are carried at cost. Depreciation is computed
over the estimated useful lives, generally ranging from 5 to 31.5 years, of the
related asset on the straight line basis. Expenditures which substantially
increase value or extend useful lives are capitalized. Expenditures for
maintenance and repairs are expensed as incurred.
INTANGIBLE ASSETS
Intangible assets consist of goodwill and trademarks arising from Warner-
Lambert's acquisition of the Cambridge Brands in 1985 and are amortized using
the straight line basis over 40 years.
INCOME TAXES
For Federal and State income tax purposes, taxable income of the Division is
included in the consolidated tax returns of Warner-Lambert. Income taxes have
been provided herein in accordance with Statement of Financial Accounting
Standards No. 109 - "Accounting for Income Taxes" as if the Division had filed
separate federal and state income tax returns. The liabilities for current and
deferred income taxes have been recognized as a component of divisional equity
in the accompanying financial statements.
EARNINGS PER SHARE
Since there is no separate capitalization or shares of stock attributed to the
Division upon which a per share calculation can be based, historical per share
data has not been presented in the accompanying financial statements.
NOTE 2 - ACCOUNTS RECEIVABLE:
Accounts receivable primarily consist of trade balances due from customers other
than Warner-Lambert. Accounts receivable consist of the following:
<TABLE>
<CAPTION>
December 31, October 15,
1992 1993
---- ----
<S> <C> <C>
Accounts receivable $2,771 $7,268
Allowance for doubtful accounts (136) (185)
------ ------
$2,635 $7,083
------ ------
------ ------
</TABLE>
Interdivisional accounts receivable are settled through Warner-Lambert's
interdivisional accounting system and, accordingly, the accounts receivable
balance does not include interdivisional accounts receivable from or payable to
other Warner-Lambert business units.
-6-
<PAGE>
Accounts receivable from sales to substantially all customers are unsecured.
The Company utilizes a centralized billing and accounts receivable. Accordingly,
accounts receivable for the Division cannot be specifically identified. The
accounts receivable balance in the accompanying financial statements represents
an allocation based on the Company's overall ratio of accounts receivable to
sales.
NOTE 3 - INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
December 31, October 15,
1992 1993
---- ----
<S> <C> <C>
Raw materials $ 282 $ 293
Finishing supplies 288 293
Work in process 43 47
Finished goods 1,408 1,441
------ ------
$2,021 $2,074
------ ------
------ ------
</TABLE>
NOTE 4 - DIVISIONAL EQUITY, ALLOCATIONS AND TRANSACTIONS WITH WARNER-LAMBERT
Warner-Lambert controls all aspects of cash management for the Division with
respect to intercompany sales and receivables and accounts payable. The net
cumulative interdivisional balances are presented as a component of divisional
equity. Warner-Lambert does not impute interest on these balances or net
divisional equity.
In addition to intercompany cash transactions, divisional equity, as reported in
the accompanying financial statements, includes the sum of accumulated net
income for the Division and allocations from Warner-Lambert.
Allocations from Warner-Lambert include costs incurred by Warner-Lambert on
behalf of the Division and include, among other charges, general and
administrative costs and advertising expenses. These charges are allocated to
the Division based on a formula which utilizes certain measures of volume.
In the opinion of management, the expense allocations were made on a reasonable
and consistent basis; however, they are not necessarily indicative of the level
of expenses which might have been incurred on a stand-alone basis. The amounts
that would have been or will be incurred on a separate company basis could
differ from the amounts allocated due to economies of scale, differences in
management approach, or changes in the number of employees and related systems
and expenses.
-7-
<PAGE>
Warner-Lambert expense allocations are reported in the accompanying financial
statements as follows:
<TABLE>
<CAPTION>
For the year For the period
ended ended
December 31, October 15,
1992 1993
------------ ------------
<S> <C> <C>
Discounts $1,139 $ 906
Distribution 697 544
Selling, advertising and promotion 5,394 4,552
Administrative 1,928 1,731
------ ------
$9,158 $7,733
------ ------
------ ------
</TABLE>
NOTE 5 - PENSION PLANS:
PENSION BENEFITS
Employees of the Division participate in a pension plan sponsored by Warner-
Lambert. Funds are contributed to a trustee as necessary to provide for current
service and for any unfunded projected benefit obligation over a reasonable
period. Retirement benefits are based on years of service and generally on the
average compensation earned in the last years of service. Total pension expense
under this plan allocated to the Division was $47 and $58 for the periods ended
December 31, 1992 and October 15, 1993, respectively.
-8-
<PAGE>
<PAGE>
EXHIBIT 28(b)
PRO FORMA FINANCIAL INFORMATION
The Company acquired the Cambridge Brands Division of Warner-Lambert Company on
October 15, 1993. The pro forma income statement data for the year ended
December 31, 1992 and the nine months ended September 30, 1993 presented below
have been prepared assuming the Company consummated the acquisition of Cambridge
Brands at the beginning of the period presented and reflect estimated purchase
accounting and other adjustments related to the acquisition. The pro forma
balance sheet data as of September 30, 1993 assumes the Company consummated the
acquisition of Cambridge Brands on September 30, 1993. The pro forma income
statement and balance sheet data presented below is unaudited. The pro forma
income statement data are not necessarily indicative of what the actual results
of operations would have been had the transactions occurred at the beginning of
the period presented, nor do the purport to indicate the results of future
operations. All amounts are in thousands except per share data.
INCOME STATEMENT DATA:
<TABLE>
<CAPTION>
For the For the nine
year ended months ended
December 31, September 30,
1992 1993
------------ -------------
<S> <C> <C>
Net sales $ 303,576 $ 244,170
Cost of goods sold 158,216 122,307
------------ -------------
145,360 121,863
Operating expenses:
Marketing, selling and
advertising 55,219 45,598
Distribution and ware-
housing 20,013 15,801
General and administrative 17,828 13,000
------------ -------------
Earnings from operations 52,300 47,464
Other income, net 3,978 3,669
Provision for income taxes (22,107) (20,441)
------------ -------------
Net earnings $ 34,171 $ 30,692
------------ -------------
------------ -------------
Net earnings per
common share $ 3.34 $ 2.91
------------ -------------
------------ -------------
Average common shares
outstanding 10,229 10,534
</TABLE>
<PAGE>
BALANCE SHEET DATA:
<TABLE>
<CAPTION>
September 30,
1993
-------------
<S> <C>
Assets
- ------
Accounts receivable $ 51,644
Inventories 71,251
Other current assets 47,055
-------------
169,950
Property, plant and
equipment 78,118
Other assets 112,114
-------------
Total assets $ 360,182
-------------
-------------
Liabilities and Shareholders' Equity
- ------------------------------------
Notes payable to banks $ 82,304
Other current liabilities 33,496
-------------
115,800
Noncurrent liabilities 37,745
Shareholders' Equity
Common stock 7,315
Capital in excess of par value 111,108
Retained earnings 90,627
Equity adjustment from foreign
currency translation (2,413)
-------------
206,637
-------------
Total liabilities and shareholders'
equity $ 360,182
-------------
-------------
</TABLE>
