-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UrfVwrVa2oLsVXzdhDCtacRsSMeTI85+pjs4hHNKm0gGobBJ/NeXSIOjduxlAhBR PjjqtjBMIEBYGqJHmbBFkw== 0000098677-03-000018.txt : 20030807 0000098677-03-000018.hdr.sgml : 20030807 20030807113002 ACCESSION NUMBER: 0000098677-03-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030628 FILED AS OF DATE: 20030807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOOTSIE ROLL INDUSTRIES INC CENTRAL INDEX KEY: 0000098677 STANDARD INDUSTRIAL CLASSIFICATION: SUGAR & CONFECTIONERY PRODUCTS [2060] IRS NUMBER: 221318955 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01361 FILM NUMBER: 03828008 BUSINESS ADDRESS: STREET 1: 7401 S CICERO AVE CITY: CHICAGO STATE: IL ZIP: 60629 BUSINESS PHONE: 3128383400 FORMER COMPANY: FORMER CONFORMED NAME: SWEETS CO OF AMERICA INC DATE OF NAME CHANGE: 19660921 10-Q 1 jun03filingd.txt TOOTSIE ROLL INDUSTRIES, INC 10-Q ENDING 6/28/03 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 28, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ----to---- COMMISSION FILE NUMBER 1-1361 Tootsie Roll Industries, Inc. (Exact Name of Registrant as Specified in its Charter) VIRGINIA 22-1318955 (State of Incorporation) (I.R.S. Employer Identification No.) 7401 South Cicero Avenue, Chicago, Illinois 60629 (Address of Principal Executive Offices) (Zip Code) 773-838-3400 (Registrant's Telephone Number, Including Area Code) 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 by check mark whether the Registrant is an accelerated filer (as Defined in Rule 12b-2 of the Exchange Act) Yes X No ___ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date (June 28, 2003) Class Outstanding (In Thousands) Common Stock, $.69 4/9 par value 34,572 Class B Common Stock, $.69 4/9 par value 17,233 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES JUNE 28, 2003 INDEX Page No. Part I - Financial Information Item 1. Financial Statements: (unaudited) Consolidated Statements of Financial Position 2 Consolidated Statements of Earnings, Comprehensive Earnings and Retained Earnings 3 Consolidated Statements of Cash Flows 4 Notes to Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6-6B Item 3. Quantitative and Qualitative Disclosures About Market Risk 6C Item 4. Controls and Procedures 6C Part II - Other Information Item 2. Changes in Securities and Use of Proceeds 7 Item 4. Submission of Matters to a Vote of Security Holders 7 Item 6. Exhibits and Reports on Form 8-K 7 Signatures 7 Exhibits 31.1 and 31.2 7A-B Exhibit 32 7C ITEM 1. FINANCIAL INFORMATION TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands of dollars) (UNAUDITED) ASSETS June 28, June 29, Dec. 31, CURRENT ASSETS 2003 2002 2002____ Cash & cash equivalents $ 54,354 $ 71,111 $105,507 Investments 58,876 62,682 40,737 Trade accounts receivable, Less allowances of 2,070, $2,012 & $2,005, respectively 20,591 22,306 22,686 Other receivables 3,104 3,898 4,073 Inventories, at cost Finished goods & work in process 53,091 54,835 26,591 Raw material & supplies 20,924 21,460 17,054 Prepaid expenses 9,196 8,061 3,819 Deferred income taxes 4,481 1,772 4,481 Total current assets 224,617 246,125 224,948 PROPERTY, PLANT & EQUIPMENT, (at cost) Land 8,299 8,335 8,297 Buildings 43,953 43,553 43,948 Machinery & equipment 202,812 192,323 196,706 255,064 244,211 248,951 Less-accumulated depreciation 125,814 114,738 120,082 Net property, plant and equipment 129,250 129,473 128,869 OTHER ASSETS Goodwill 38,151 38,151 38,151 Trademarks 79,348 79,348 79,348 Investments 128,177 88,588 116,501 Split dollar officer life insurance and Other assets 58,260 55,028 58,263 303,936 261,115 292,263 Total assets $657,803 $636,713 $646,080 -2- (The accompanying notes are an integral part of these statements)
(in thousands except per share data) (UNAUDITED) LIABILITIES AND SHAREHOLDERS' EQUITY June 28, June 29, Dec. 31, CURRENT LIABILITIES 2003 2002 2002____ Accounts payable $ 13,122 $ 13,228 $ 12,505 Dividends payable 3,627 3,617 3,579 Accrued liabilities 37,804 34,014 35,825 Income taxes payable 22,329 19,843 11,187 Total current liabilities 76,882 70,702 63,096 NON-CURRENT LIABILITIES Industrial development bonds 7,500 7,500 7,500 Postretirement health care and life Insurance benefits 8,512 7,794 8,151 Deferred compensation and other liabilities 23,222 20,612 20,939 Deferred income taxes 19,775 16,742 19,654 Total non-current liabilites 59,009 52,648 56,244 Total liabilities 135,891 123,350 119,340 SHAREHOLDERS' EQUITY Common stock, $.69-4/9 par value- 120,000, shares authorized 34,572, 34,871 & 34,248 respectively, issued 24,008 24,216 23,783 Class B common stock, $.69-4/9 par value- 40,000, shares authorized 17,233, 16,784 & 16,759, respectively, issued 11,967 11,655 11,638 Capital in excess of par value 376,405 375,700 355,658 Retained earnings 122,191 114,588 148,705 Accumulated other comprehensive earnings (loss) (10,667) (10,804) (11,052) Treasury stock (at cost)- 56, 56 & 56, shares respectively (1,992) (1,992) (1,992) Total shareholders' equity 521,912 513,363 526,740 Total liabilities and Shareholders' equity $657,803 $636,713 $646,080 -2A- The accompanying notes are an integral part of these statements.
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS (NOTE 1) (in thousands except per share amounts) (UNAUDITED) 13 Weeks Ended June 28, 2003 & June 29,2002 Net sales (note 2) $ 77,725 $ 77,131 Cost of goods sold 41,498 41,376 Gross margin 36,227 35,755 Selling, marketing and administrative expense 18,367 18,049 Earnings from operations 17,860 17,706 Other income, net 746 1,098 Earnings before income taxes 18,606 18,804 Provision for income taxes 6,289 6,488 Net earnings 12,317 12,316 Other comprehensive income, before tax: Foreign currency translation adjustments 501 (1,101) Unrealized gains (losses) on securities: Unrealized holding gains (losses) arising during period $ 305 $(255) Less: amounts realized in earnings 25 330 1 (254) Unrealized gains (losses) on derivatives: Unrealized holding gains (losses) arising during period (833) 606 Less: amounts realized in earnings 347 (486) 408 1,014 Other comprehensive income (loss), before tax 345 (341) Income tax benefit (expense) related to items of other comprehensive income 58 (280) Other comprehensive income (loss), net of tax 403 (621) Comprehensive earnings $ 12,720 $ 11,695 Retained earnings at beginning of period $113,498 $105,885 Net earnings 12,317 12,316 Cash dividends (3,624) (3,613) Retained earnings at end of period $122,191 $114,588 Net earnings per share (note 3) $.24 $.23 Dividends per share * $.07 $.07 Average number of shares outstanding 51,891 53,129 *Does not include 3% stock dividend to shareholders of record on 3/04/03 and 3/05/02. -3- (These accompanying notes are an integral part of the statements)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS (NOTE 1) (in thousands except per share amounts) (UNAUDITED) 26 Weeks Ended June 28, 2003 & June 29,2002 Net sales (note 2) $153,295 $156,122 Cost of goods sold 84,125 84,536 Gross margin 69,170 71,586 Selling, marketing and administrative expense 35,895 35,545 Earnings from operations 33,275 36,041 Other income, net 1,811 2,261 Earnings before income taxes 35,086 38,302 Provision for income taxes 11,860 13,214 Net earnings 23,226 25,088 Other comprehensive income, before tax: Foreign currency translation adjustments 179 (809) Unrealized gains on securities: Unrealized holding gains (losses) arising during period $ 238 $(388) Less: amounts realized in earnings 37 275 50 (338) Unrealized gains on derivatives: Unrealized holding gains (losses) arising during period (385) (404) Less: amounts realized in earnings 437 52 613 209 Other comprehensive income (loss), before tax 506 (938) Income tax expense (benefit) related to items of other comprehensive income (121) 47 Other comprehensive income (loss), net of tax 385 (891) Comprehensive earnings $ 23,611 $ 24,197 Retained earnings at beginning of period $148,705 $161,345 Net earnings 23,226 25,088 Cash dividends (7,169) (7,121) Stock dividends - 3% (42,571) (64,724) Retained earnings at end of period $122,191 $114,588 Net earnings per share (note 3) $.45 $.47 Dividends per share * $.14 $.14 Average number of shares outstanding 52,070 53,212 *Does not include 3% stock dividend to shareholders of record on 3/04/03 and 3/05/02. -3A- (These accompanying notes are an integral part of the statements)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 26 WEEKS ENDED June 29, 2003 & June 29, 2002 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 23,226 $ 25,088 Adjustments to reconcile net earnings to Net cash provided by operating activities: Depreciation and amortization 5,791 5,818 Amortization/accretion of marketable securities 1,223 590 Purchase of trading securities (2,126) (1,759) (Increase) decrease in assets: Accounts receivable 2,119 (2,008) Other receivables 1,000 (436) Inventories (30,324) (35,382) Prepaid expenses and other assets (5,372) (7,484) Increase (decrease) in liabilities: Accounts payable and accrued liabilities 2,570 3,790 Income taxes payable and deferred 11,272 8,991 Postretirement health care and life insurance benefits 361 344 Deferred compensation and other liabilities 494 697 Other 7 (33) Net cash provided by (used in) operating activities 10,241 (1,784) CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (6,065) (3,157) Purchase of held to maturity securities (35,941) (22,286) Maturity of held to maturity securities 10,066 16,074 Purchase of available for sale securities (17,746) (16,733) Sale and maturity of available for sales securities 16,682 11,679 Net cash used in investing activities (33,004) (14,423) CASH FLOWS FROM FINANCING ACTIVITIES: Shares repurchased and retired (21,212) (11,822) Dividends paid in cash (7,178) (7,392) Net cash used in financing activities (28,390) (19,214) Decrease in cash and cash equivalents (51 153) (35,421) Cash and cash equivalents-beginning of year 105,507 106,532 Cash and cash equivalents end of quarter $ 54,354 $ 71,111 Supplemental cash flow information: Income taxes paid $ 2,756 $ 4,164 Interest paid $ 117 $ 216 (These accompanying notes are an integral part of the statements) -4-
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 28, 2003 (in thousands except per share amounts) (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. All adjustments were of a normal and recurring nature. Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company's 2002 Annual Report on Form 10-K. Note 2 - Average shares outstanding for the period ended June 28, 2003 reflects stock repurchases of 721 shares for $21,212 and a 3% stock dividend distributed on April 16, 2003. Average shares outstanding for the period ended June 29, 2002 reflects stock repurchases of 300 for $11,822 and a 3% stock dividend distributed on April 17, 2002. Note 3 - Results of operations for the period ended June 28, 2003 are not necessarily indicative of results to be expected for the year to end December 31, 2003 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 4 - New Accounting and Reporting Pronouncements: In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" (SFAS No. 146). The provisions of SFAS No. 146 are effective for exit or disposal activities that are initiated after December 31, 2002. In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." This Interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. In April 2003, the FASB issued Statement No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" (SFAS No. 149). SFAS No. 149 amends and clarifies financial accounting and reporting related to derivative instruments, including certain derivative instruments embedded in other contracts. In November 2002, the EITF published Issue No. -5- 00-21, "Revenue Arrangements with Multiple Deliverables" ("EITF 00-21"), which addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. In January 2003, the FASB issued FASB Interpretation No. 46, Consoli- dation of Variable Interest Entities, an interpretation of ARB 51" ("FIN 46"). FIN 46 requires that the assets, liabilities and results of the activity of variable interest entities be consolidated into the financial statements of the company that has the controlling financial interest. The Company believes that the above-discussed pronouncements are generally not applicable to the Company's operations and to the extent that they may be applicable they are not expected to have a significant impact on the Company's consolidated financial statements. -5A- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollars in thousands except per share amounts) 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: Second Quarter, 2003 Second Quarter vs. 2003 2002 Second Quarter, 2002 $77,725 $77,131 +0.8% First Half, 2003 First Half vs. 2003 2002 First Half, 2002 $153,295 $156,122 -1.8% Second quarter sales were $77,725 compared to $77,131 in the second quarter 2002, an increase of $594 or 1%. First half sales were $153,295 compared to $156,122 in the prior year first half, a decrease of $2,827 or 2%. Although the timing of Easter shipments in 2003 contributed to improved sales results for the second quarter 2003, the sluggish economy, a difficult retail environ- ment, lower sales in Mexico and Canada, and higher sales in the fourth quarter of 2002 as a result of January 2003 price increases contributed to the sales decline in the first half 2003. Selective price increases did however aid sales results in the second quarter and first half of 2003. COST OF SALES: Cost of Sales as a Second Quarter Percentage of Net Sales 2003 2002 2nd Qtr. 2003 2nd Qtr. 2002 $41,498 $41,376 53.4% 53.6% Cost of Sales as a First Half Percentage of Net Sales 2003 2002 1st Half 2003 1st Half 2002 $84,125 $84,536 54.9% 54.1% Cost of sales as a percentage of net sales decreased from 53.6% for second quarter 2002 to 53.4% for second quarter 2003. This improvement reflects selective price increases, higher total sales and effective cost control programs, however, higher ingredient costs mitigated much of these benefits. First half cost of sales as a percentage of net sales increased from 54.1% in 2002 to 54.9% in 2003. This adverse increase in costs reflects higher ingredient costs and lower sales volume as discussed above. -6- The Company has experienced higher ingredient costs for almost all of its principal ingredients, including sugar, corn syrup, vegetable oil, cocoa and chocolate. Although selling price increases were initiated for many of the Company's products in January 2003, additional selling price increases and bag weight declines (indirect selling price increases) on certain items were phased-in throughout the first half 2003 in order to further mitigate these higher costs. NET EARNINGS: Second Quarter, 2003 Second Quarter vs. 2003 2002 Second Quarter, 2002 $12,317 $12,316 +0.01% First Half, 2003 First Half vs. 2003 2002 First Half, 2002 $23,226 $25,088 -7.4% Second quarter, earnings from operations were $17,860 and $17,706 in 2003 and 2002, respectively, an increase of $154 or 1%. First half earnings from operations were $33,275 and $36,041 in 2003 and 2002, respectively, a decrease of $2,766 or 8%. Improved second quarter 2003 earnings from operations are the result of increased sales, price increases and cost controls as discussed above. The decrease in first half 2003 operating earnings is attributed to lower sales volumes and higher ingredient costs as discussed above. In addition, first half 2003 results reflect a $500 pre-tax provision relating to a customer bankruptcy. Second quarter 2003 net earnings were $12,317 compared to second quarter 2002 net earnings of $12,316. Second quarter 2003 earnings per share were $0.24, compared to $.23 per share in the prior year comparative period, an increase of $.01 or 4.3%. First half 2003 net earnings were $23,226 compared to the prior year first half 2002 net earnings of $25,088. First half 2003 earnings per share were $.45 compared to $.47 in first half 2002, a decrease of $.02 or 4.3%. Net earnings per share in the second quarter and first half 2003 were aided by Share repurchases which resulted in a slight reduction in average shares out- standing. Lower investment income resulting from lower interest rates adversely affected second quarter and first half 2003 net earnings as compared to corre- sponding reporting periods in 2002. The consolidated effective income tax rate favorably decreased from 34.5% in the first half of 2002 to 33.8% in the first half of 2003. This improvement generally reflects a reduction in state income taxes. -6A- LIQUIDITY AND CAPITAL RESOURCES: The Company's current ratio (current assets divided by current liabilities) is 2.9 to 1 as of the end of the second quarter 2003 as compared to 3.5 to 1 as of the second quarter 2002 and 3.6 to 1 as of the fourth quarter 2002. Net working capital was $147,735 as of the end of the second quarter 2003 as compared to $175,423 and $161,852 as of the end of the second quarter 2002 and fourth quarter 2002, respectively. These decreases in working capital are principally due to changes in long-term investments, which were $128,177 as of the second quarter 2003 compared to $116,501 and $88,588 as of the end of the fourth quarter 2002 and second quarter 2002, respectively. Net cash provided by operating activities was $10,241 for the first half 2003 compared to $1,784 of cash used by operating activities for the prior year first half 2002. This change primarily reflects changes in accounts receivable, inventories, and income taxes payable and deferred. Capital expenditures for 2003 are antic- ipated to be generally in line with historical annualized spending and are to be funded from the Company's cash flow from operations and internal sources. Investments in debt securities that matured during the first half 2003 and 2002 were generally replaced with debt securities with maturities greater than one year. The Company repurchased and retired $21,212 and $11,822 of its shares outstand- ing during the first half 2003 and 2002, respectively. This discussion and certain other sections of this Form 10-Q contain forward- looking statements that are based largely on the Company's current expectations and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. Such risks, trends and uncertainties, which in some instances are beyond the Company's control, include changes in demand and consumer prefer- ences, including seasonal events such as Halloween; the effect of ingredient costs; the effect of acquisitions on the Company's results of operations and financial condition; the Company's reliance on third-party vendors for various goods and services; changes in the confectionary market place including action taken by major retailers and customer accounts; customer and consumer response to marketing programs and price adjustments; changes in governmental laws and regulations including taxes; and the overall competitive environment. The words "believe," "expect," "anticipate," "estimate," "intend" and similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements, which are as of the date of this filing. -6B- ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK: The Company is exposed to various market risks, including fluctuations in sugar, corn syrup, edible oils, cocoa and packaging costs. The Company also invests in securities with maturities of up to three years, the majority of which are held to maturity, which limits the Company's exposure to interest rate fluctuations. There has been no material change in the Company's market risks that would significantly affect the disclosures made in the Form 10-K for the year ended December 31, 2002. Item 4. CONTROLS AND PROCEDURES Under the supervision and with the participation of management, the chief executive officer and chief financial officer of the Company have evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures within 90 days of the filing date of this quarterly report and, based on their evaluation, the chief executive officer and chief financial officer have concluded that these controls and procedures are effective. There were no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures are also designed to ensure that information is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. -6C- PART II - OTHER INFORMATION TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES______ Item 2. Changes in Securities and Use of Proceeds Sales of unregistered Securities - None. Item 4. Submission of Matters to a Vote of Security-Holders At the Annual Meeting of Shareholders of the Company, held on May 5, 2003, the following number of votes were cast for the matters indicated: 1. For the election of five Directors of the Company by the holders of Common Shares and Class B Common Shares voting together: Broker Nominee For Withheld Abstain Non-Vote Melvin J. Gordon 191,482,356 4,175,577 -0- -0- Ellen R. Gordon 191,488,895 4,169,038 -0- -0- Lana Jane Lewis-Brent 193,512,160 2,145,773 -0- -0- Charles W. Siebert 193,494,941 2,162,992 -0- -0- Richard P. Bergeman 193,520,786 2,137,147 -0- -0- 2. Proposal to ratify the appointment of PricewaterhouseCoopers LLP as auditors for the fiscal year 2003: Broker For Withheld Abstain Non-Vote Common Shares and Class B Common Shares voting together 192,892,260 2,627,807 137,866 -0- No other matters were submitted to a vote by ballot at the 2003 Annual Meeting. Item 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibit 31.1 and 31.2 - Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 32 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Form 8-K was furnished on April 16, 2003 containing a press release announcing first quarter 2003 earnings. 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: Aug. 07, 2003 BY:/s/ Melvin J. Gordon_____ Melvin J. Gordon Chairman of the Board BY:_/s/ G. Howard Ember, Jr. G. Howard Ember, Jr. Vice President - Finance -7- Exhibit 31.1 Section 302 Certification 1. I, Melvin J. Gordon, Chairman and Chief Executive Officer of Tootsie Roll Industries, Inc., certify that I have reviewed this Form 10-Q of Tootsie Roll Industries, Inc. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: Aug. 07, 2003 _/s/ Melvin J. Gordon_____ Melvin J. Gordon Chairman and Chief Executive officer -7A- Exhibit 31.2 Section 302 Certification 1. I, G Howard Ember, Vice President/Finance and Chief Financial Officer of Tootsie Roll Industries, Inc., certify that I have reviewed this Form 10-Q of Tootsie Roll Industries, Inc. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: Aug. 07, 2003 _/s/ G. Howard Ember, Jr._ G. Howard Ember, Jr. Vice President/Finance and Chief Financial Officer -7B- Exhibit 32 Certificate Pursuant to Section 1350 of Chapter 63 Of Title 18 of the United States Code Each of the undersigned officers of Tootsie Roll Industries, Inc. Certifies that (i) the Quarterly Report on Form 10-Q of Tootsie Roll Industries, Inc. for the quarterly period ended June 28, 2003 (the Form 10-Q) fully complies with the requirements of secton 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Tootsie Roll Industries, Inc. and its subsidiaries. Dated: Aug. 07, 2003 _/s/ Melvin J Gordon___ MELVIN J GORDON Chairman and Chief and Executive Officer Dated: Aug. 07, 2003 _/s/ G. Howard Ember, Jr. G. Howard Ember, Jr. V.P./Finance and Chief Financial Officer -7C- -----END PRIVACY-ENHANCED MESSAGE-----