<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 1, 1995 Commission File Number 1 - 1361
TOOTSIE ROLL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 22 - 1318955
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7401 South Cicero Avenue
Chicago, Illinois 60629
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 838 - 3400
None
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
Class Outstanding
Common Stock, $.69 4/9 par value 7,535,142
Class B Common Stock, $.69 4/9 par value 3,636,190
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<TABLE>
PART I - FINANCIAL INFORMATION
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(UNAUDITED)
<CAPTION>
ASSETS April 1 April 2 Dec. 31
CURRENT ASSETS 1995 1994 1994
<S> <C> <C> <C>
Cash & Cash Equiv. $ 22,411,874 $ 7,076,593 $ 16,508,659
Marketable Securities 40,130,450 45,810,891 45,860,983
Accounts Receivable
Less Allowances of
$1,476,000,$1,856,000 & $1,466,000 22,606,310 24,104,898 22,086,591
Inventories at Cost
(Last-in,First-out):
Finished Goods & Work in Process 23,582,547 26,300,333 16,704,078
Raw Material & Supplies 14,647,277 11,294,067 12,464,240
Prepaid Expenses 3,077,542 4,518,666 3,094,273
Deferred Income Taxes 2,455,583 2,094,000 2,168,000
Total Current Assets 128,911,583 121,199,448 118,886,824
PROPERTY, PLANT & EQUIPMENT,
(at Cost)
Land 6,936,880 4,250,667 6,671,973
Building 27,249,111 25,347,199 26,981,822
Machinery & Equip. 109,437,699 107,900,222 109,438,484
Leasehold Impvts. 5,641 5,641 5,641
143,629,331 137,503,729 143,097,920
Less-Accumulated Deprec.
and Amortization 59,146,475 52,230,589 57,449,897
84,482,856 85,273,140 85,648,023
OTHER ASSETS
Intangibles 97,991,627 100,697,927 98,668,201
Miscellaneous Invest. 52,535 90,977 90,977
Misc. Other Assets 6,836,845 3,786,750 6,788,773
104,881,007 104,575,654 105,547,951
Total Assets $318,275,446 $311,048,242 $310,082,798
</TABLE>
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<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY April 1 April 2 Dec. 31
CURRENT LIABILITIES 1995 1994 1994
<S> <C> <C> <C>
Bank Loans Short Term $ -- $ 20,000,000 $ --
Accounts Payable 6,303,796 6,840,051 6,124,104
Dividends Payable 1,333,885 1,153,426 1,219,291
Accrued Liabilities 16,426,836 17,112,955 17,045,884
Fed. & State Income Taxes 6,452,654 6,920,753 1,871,858
Total Current Liabilities 30,517,171 52,027,185 26,261,137
NON-CURRENT LIABILITIES
E.T.I. Term Loan 20,000,000 20,000,000 20,000,000
Ind.Dev.Bonds Ser.1992 7,500,000 7,500,000 7,500,000
Post Retirement Benefits 5,096,401 4,630,487 4,992,719
Deferred Compensation 3,296,721 2,494,603 3,151,564
Deferred Fed.Inc.Taxes 7,366,000 6,263,422 7,716,256
Total Non-Current Liabilities 43,259,122 40,888,512 43,360,539
SHAREHOLDERS' EQUITY
Common Stk., $.69-4/9 par value-
25,000,000 shares author.
7,535,142, 7,292,008 & 7,305,999
respectively, issued 5,232,602 5,063,759 5,073,475
Class B Common Stk $.69-4/9 par value-
10,000,000 shares author.
3,636,190, 3,555,701 & 3,541,710
respectively issued 2,525,067 2,469,171 2,459,455
Capital in Excess of Par Value 153,929,275 132,997,160 132,997,160
Retained Earnings 92,616,954 80,373,345 107,762,823
Cumulative Translation Adjustment (9,804,745) (2,770,890) (7,831,791)
Total Shareholders' Equity 244,499,153 218,132,545 240,461,122
Total Liabilities and
Shareholders' Equity $318,275,446 $311,048,242 $ 310,082,798
</TABLE>
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<TABLE>
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
EARNINGS AND RETAINED EARNINGS (NOTE 1)
(UNAUDITED)
<CAPTION>
13 Weeks Ended
April 1, 1995 & April 2, 1994
1995 1994
<S> <C> <C>
NET SALES (Note 2) $ 60,269,205 $ 56,370,043
Cost of goods sold 30,702,860 28,248,858
Gross Margin 29,566,345 28,121,185
Operating Expenses:
Marketing, Selling and Advertising 9,770,951 9,272,937
Distribution and Warehousing 4,787,283 4,110,656
General and Administrative 3,286,297 3,051,475
Goodwill amortization 676,575 676,575
18,521,106 17,111,643
Earnings from Operations 11,045,239 11,009,542
Other Income (Expense) Net 706,231 358,610
Earnings before Income Taxes 11,751,470 11,368,152
Provision for Income Taxes 4,433,000 4,406,000
Net Earnings (Note 5) 7,318,470 6,962,152
Retained Earnings at beginning of period 107,762,823 96,646,704
115,081,293 103,608,856
Deduct:
Cash Dividends 1,193,248 1,000,709
Stock Dividends - 3% 21,271,091 22,234,802
22,464,339 23,235,511
Retained Earnings at end of period $ 92,616,954 $ 80,373,345
Net Earnings per Share (Note 3) $ .66 $ .62
Dividends Per Share * $ .11 $ .095
Average Number of Shares Outstanding
(Notes 3 & 4) 11,171,332 11,171,332
*Does not include 3% Stock Dividend to Shareholders of Record on 3/10/95 and 3/11/94.
</TABLE>
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<TABLE>
TOOTSIE ROLL INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
13 Weeks Ended
April 1, 1995 & April 2, 1994
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Earnings $ 7,318,470 $ 6,962,152
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 2,332,863 2,893,329
(Increase) decrease in assets:
Accounts receivable (2,733,373) (3,448,892)
Inventories (8,858,292) (8,300,249)
Prepaid expenses and other assets 47,453 (851,765)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities (431,464) (224,993)
Income taxes payable and deferred 3,972,551 3,762,999
Postretirement health care and life
insurance benefits 103,682 132,653
Other long term liabilities 145,157 121,149
Other -- (44,474)
Net cash provided by operating activities 1,897,047 1,001,909
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (531,411) (778,678)
Investment purchases (4,760,586) (5,748,525)
Investment sales 10,491,056 14,154,181
Net cash provided by investing activities 5,199,059 7,626,978
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment under lines of credit agreements -- (2,600,673)
Dividends paid in cash (1,192,891) (1,000,403)
Other, net -- 62,973
Net cash used in financing activities (1,192,891) (3,538,103)
Increase in cash and cash equivalents 5,903,215 5,090,784
Cash and cash equivalents-beginning of year 16,508,659 1,985,809
Cash and cash equivalents end of quarter $22,411,874 $ 7,076,593
Supplemental cash flow information:
Income taxes paid $ 308,000 $ 460,000
Interest paid $ 459,000 $ 693,000
</TABLE>
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TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 1, 1995
(UNAUDITED)
Note 1 Foregoing data has been prepared from the unaudited financial
records of the Company and in the opinion of Management all
adjustments necessary for a fair statement of the results
for the interim period have been reflected.
Note 2 The Company's unshipped orders at April 1, 1995 amounted to
$13,800,000.
Note 3 Based on Average Shares outstanding adjusted for Stock
Dividends.
Note 4 Includes 3% Stock Dividends distributed on April 21, 1995 and
April 22, 1994.
Note 5 Results of operations for the period ended April 1, 1995 are
not necessarily indicative of results to be expected for the
year to end December 31, 1995 because of the seasonal nature
of the Company's operations. Historically, the Third Quarter
has been the Company's largest Sales Quarter due to Halloween
Sales.
Note 6 Form 8-K was not required to be filed during the First
Quarter of 1995.
Note 7 Sales of unregistered Securities - None.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
THE CONSOLIDATED STATEMENTS OF EARNINGS
The following is Management's discussion of the Company's operating
results and analysis of factors which have affected the accompanying
Statement of Earnings:
NET SALES:
First Quarter, 1995
First Quarter vs.
1995 1994 First Quarter, 1994
$60,269,205 $56,370,043 +6.9%
First Quarter 1995 net sales of $60,269,205, a record, were up 6.9%
from First Quarter 1994 net sales of $56,370,043. This net sales
increase is principally attributable to volume increases. Sales
rose primarily as a result of successful product line extensions,
including Easter products, and successful promotional programs.
Consolidated sales were adversely affected by the devaluation of the
Mexican peso. Although Mexican peso sales were up significantly due to
price increases and volume improvements, the translated U.S.
dollar sales in Mexico were substantially lower in 1995 compared to
1994 as a result of exchange rate changes.
First Quarter 1995 net sales of $60,269,205 were down from Fourth
Quarter 1994 net sales of $66,657,679. This is not considered unusual
as the First Quarter of the year is normally the company's lowest
quarter in sales and is consistent with the historical trend.
COST OF SALES:
Cost of Sales as a
First Quarter Percentage of Net Sales
1995 1994 1st Qtr. 1995 1st Qtr. 1994
$30,702,860 $28,248,858 50.9% 50.1%
Cost of sales as a percentage of net sales increased slightly from
50.1% for First Quarter 1994 to 50.9% for First Quarter 1995. This
increase reflects increases in certain ingredients and packaging
material costs and some changes in the sales mix of products.
NET EARNINGS:
First Quarter, 1995
First Quarter vs.
1995 1994 First Quarter, 1994
$7,318,470 $6,962,152 +5.1%
First Quarter 1995 net earnings of $7,318,470 or $0.66 per share, a
record, were up 5.1% from net earnings of $6,962,152 or $0.62 per share
for the First Quarter 1994. The increase in net earnings reflects
higher sales and increased net investment income. The increase in net
investment income is principally due to an overall increase in cash
equivalents and marketable securities, and reduced levels of debt
outstanding.
In addition to the above, net earnings were aided by a slight reduction
in the overall effective tax rate reflecting various state and federal
tax benefits, including increased tax-exempt investment income.
First Quarter 1995 net earnings of $7,318,470 decreased $404,696 or
5.2% from Fourth Quarter of 1994 net earnings of $7,723,166, which
reflects the lower level of sales in the First Quarter 1995 compared to
the Fourth Quarter 1994. This is consistent with historical trends.
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PART II - OTHER INFORMATION
TOOTSIE ROLL INDUSTRIES, INC
AND SUBSIDIARIES
- NONE -
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 thereunto duly authorized.
TOOTSIE ROLL INDUSTRIES, INC.
Date: May 10, 1995 BY:
Melvin J. Gordon
Chairman of the Board
BY:
G. Howard Ember
Vice President - Finance
-7-
<PAGE>
Act of 1934 the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
TOOTSIE ROLL INDUSTRIES, INC.
Registrant
G. Howard Ember, Jr.
Date G. Howard Ember, Jr.
Principal Financial Officer
Ellen R. Gordon
Date Ellen R. Gordon
Principal Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AND CONSOLIDATED
STATEMENTS OF EARNINGS AND RETAINED EARNINGS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Apr-01-1995
<PERIOD-TYPE> 3-MOS
<CASH> 22,412
<SECURITIES> 40,130
<RECEIVABLES> 24,082
<ALLOWANCES> 1,476
<INVENTORY> 38,230
<CURRENT-ASSETS> 128,912
<PP&E> 143,629
<DEPRECIATION> 59,146
<TOTAL-ASSETS> 318,275
<CURRENT-LIABILITIES> 30,517
<BONDS> 7,500
0
0
<COMMON> 7,758
<OTHER-SE> 236,741
<TOTAL-LIABILITY-AND-EQUITY> 318,275
<SALES> 60,269
<TOTAL-REVENUES> 60,269
<CGS> 30,703
<TOTAL-COSTS> 18,521
<OTHER-EXPENSES> (1,088)
<LOSS-PROVISION> 90
<INTEREST-EXPENSE> 382
<INCOME-PRETAX> 11,751
<INCOME-TAX> 4,433
<INCOME-CONTINUING> 7,318
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,318
<EPS-PRIMARY> .66
<EPS-DILUTED> .66
</TABLE>
