-----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, I3QCx4uKlMCAjQS9ZnxjXimD8KhP/BGB2tL1Xjybgi+ef3qRc0p08qEHFUj2BQa0 0ci/qd649p6x+K6v8ANT+g== 0000098677-03-000025.txt : 20031107 0000098677-03-000025.hdr.sgml : 20031107 20031107105046 ACCESSION NUMBER: 0000098677-03-000025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030927 FILED AS OF DATE: 20031107 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: 03983910 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 sep03filing.txt TOOTSIE ROLL INDUSTRIES, INC. 10-Q ENDING 9/27/03 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 SEPTEMBER 27, 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 34,421 Class B Common Stock, $.69 4/9 par value 17,153 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES SEPTEMBER 27, 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 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 Sept 27, Sept 28, Dec. 31, CURRENT ASSETS 2003 2002 2002___ Cash & cash equivalents $ 46,845 $ 62,801 $105,507 Investments 92,465 53,582 40,737 Trade accounts receivable, Less allowances of 3,258, $3,094 & $2,005, respectively 83,137 80,717 22,686 Other receivables 2,849 3,528 4,073 Inventories, at cost Finished goods & work in process 30,194 30,091 26,591 Raw material & supplies 16,522 17,589 17,054 Prepaid expenses 5,446 5,336 3,819 Deferred income taxes 4,481 1,772 4,481 Total current assets 281,939 255,416 224,948 PROPERTY, PLANT & EQUIPMENT, (at cost) Land 8,277 8,308 8,297 Buildings 44,001 43,556 43,948 Machinery & equipment 205,159 195,768 196,706 257,437 247,632 248,951 Less-accumulated depreciation 128,264 117,813 120,082 Net property, plant and equipment 129,173 129,819 128,869 OTHER ASSETS Goodwill 38,151 38,151 38,151 Trademarks 79,348 79,348 79,348 Investments 104,591 103,608 116,501 Split dollar officer life insurance and Other assets 57,774 58,265 58,263 279,864 279,372 292,263 Total assets $690,976 $664,607 $646,080 -2- (The accompanying notes are an integral part of these statements)
(in thousands except per share data) (UNAUDITED) LIABILITIES AND SHAREHOLDERS' EQUITY Sept 27, Sept 28, Dec. 31, CURRENT LIABILITIES 2003 2002 2002____ Accounts payable $ 16,037 $ 13,096 $ 12,505 Dividends payable 3,613 3,612 3,579 Accrued liabilities 46,160 41,371 35,825 Income taxes payable 27,717 21,194 11,187 Total current liabilities 93,527 79,273 63,096 NON-CURRENT LIABILITIES Industrial development bonds 7,500 7,500 7,500 Postretirement health care and life Insurance benefits 8,690 7,966 8,151 Deferred compensation and other liabilities 24,284 19,927 20,939 Deferred income taxes 19,633 16,665 19,654 Total non-current liabilites 60,107 52,058 56,244 Total liabilities 153,634 131,331 119,340 SHAREHOLDERS' EQUITY Common stock, $.69-4/9 par value- 120,000, shares authorized 34,421, 34,821 & 34,248 respectively, issued 23,903 24,182 23,783 Class B common stock, $.69-4/9 par value- 40,000, shares authorized 17,153, 16,765 & 16,759, respectively, issued 11,912 11,642 11,638 Capital in excess of par value 369,446 373,157 355,658 Retained earnings 145,527 137,596 148,705 Accumulated other comprehensive earnings (loss) (11,454) (11,309) (11,052) Treasury stock (at cost)- 56, 56 & 56, shares respectively (1,992) (1,992) (1,992) Total shareholders' equity 537,342 533,276 526,740 Total liabilities and Shareholders' equity $690,976 $664,607 $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 Sept 27, 2003 & Sept 28,2002 Net sales $147,201 $146,298 Cost of goods sold 84,818 84,338 Gross margin 62,383 61,960 Selling, marketing and administrative expense 22,568 22,599 Earnings from operations 39,815 39,361 Other income, net 886 845 Earnings before income taxes 40,701 40,206 Provision for income taxes 13,756 13,590 Net earnings 26,945 26,616 Other comprehensive income, before tax: Foreign currency translation adjustments (545) (377) Unrealized gains (losses) on securities: Unrealized holding gains (losses) arising during period $ 150 $(423) Less: amounts realized in earnings (37) 113 6 (417) Unrealized losses on derivatives: Unrealized holding losses arising during period (341) (192) Less: amounts realized in earnings (156) (497) 405 213 Other comprehensive loss, before tax (929) (581) Income tax benefit related to items of other comprehensive income 142 76 Other comprehensive loss, net of tax (787) (505) Comprehensive earnings $ 26,158 $ 26,111 Retained earnings at beginning of period $122,191 $114,588 Net earnings 26,945 26,616 Cash dividends (3,609) (3,608) Retained earnings at end of period $145,527 $137,596 Net earnings per share (note 2) $.52 $.50 Dividends per share * $.07 $.07 Average number of shares outstanding 51,662 53,074 *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) 39 Weeks Ended Sept 27, 2003 & Sept 28,2002 Net sales $300,496 $302,420 Cost of goods sold 168,943 168,874 Gross margin 131,553 133,546 Selling, marketing and administrative expense 58,463 58,144 Earnings from operations 73,090 75,402 Other income, net 2,697 3,106 Earnings before income taxes 75,787 78,508 Provision for income taxes 25,616 26,804 Net earnings 50,171 51,704 Other comprehensive income, before tax: Foreign currency translation adjustments (366) (1,186) Unrealized gains (losses) on securities: Unrealized holding gains (losses) arising during period $ 388 $(811) Less: amounts realized in earnings -0- 388 56 (755) Unrealized gains on derivatives: Unrealized holding losses arising during period (726) (596) Less: amounts realized in earnings 281 (445) 1,018 422 Other comprehensive loss, before tax (423) (1,519) Income tax benefit related to items of other comprehensive income 21 123 Other comprehensive loss, net of tax (402) (1,396) Comprehensive earnings $ 49,769 $ 50,308 Retained earnings at beginning of period $148,705 $161,345 Net earnings 50,171 51,704 Cash dividends (10,778) (10,729) Stock dividends - 3% (42,571) (64,724) Retained earnings at end of period $145,527 $137,596 Net earnings per share (note 2) $.97 $ .97 Dividends per share * $.21 $.21 Average number of shares outstanding 51,939 53,166 *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) 39 WEEKS ENDED Sept 27, 2003 & Sept 28, 2002 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 50,171 $ 51,704 Adjustments to reconcile net earnings to Net cash provided by operating activities: Depreciation and amortization 8,753 8,893 Amortization/accretion of marketable securities 1,886 949 Purchase of trading securities (2,591) (2,185) (Increase) decrease in assets: Accounts receivable (60,540) (60,577) Other receivables 943 220 Inventories (3,181) (6,837) Prepaid expenses and other assets (1,153) (8,007) Increase (decrease) in liabilities: Accounts payable and accrued liabilities 13,946 11,084 Income taxes payable and deferred 16,510 10,402 Postretirement health care and life insurance benefits 540 516 Deferred compensation and other liabilities 1,933 1,932 Other (16) (38) Net cash provided by operating activities 27,201 8,056 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (9,272) (6,788) Purchase of held to maturity securities (47,091) (49,893) Maturity of held to maturity securities 19,401 29,858 Purchase of available for sale securities (41,359) (26,248) Sale and maturity of available for sales securities 31,593 26,701 Net cash used in investing activities (46,728) (26,370) CASH FLOWS FROM FINANCING ACTIVITIES: Shares repurchased and retired (28,332) (14,412) Dividends paid in cash (10,803) (11,005) Net cash used in financing activities (39,135) (25,417) Decrease in cash and cash equivalents (58 662) (43,731) Cash and cash equivalents-beginning of year 105,507 106,532 Cash and cash equivalents end of quarter $ 46,845 $ 62,801 Supplemental cash flow information: Income taxes paid $ 11,231 $ 16,497 Interest paid $ 140 $ 236 (These accompanying notes are an integral part of the statements) -4-
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPT 27, 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 September 27, 2003 reflects stock repurchases of 952 shares for $28,332 and a 3% stock dividend distributed on April 16, 2003. Average shares outstanding for the period ended September 28, 2002 reflects stock repurchases of 370 for $14,412 and a 3% stock dividend distributed on April 17, 2002. Note 3 - Results of operations for the period ended September 27, 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: Third Quarter, 2003 Third Quarter vs. 2003 2002 Third Quarter, 2002 $147,201 $146,298 +0.6% Nine Months, 2003 Nine Months vs. 2003 2002 Nine Months, 2002 $300,496 $302,420 -0.6% Third quarter net sales were $147,201 compared to $146,298 in the third quarter 2002, an increase of $903 or 0.6%. Nine Month sales were $300,496 compared to $302,420 in the prior year corresponding period, a decrease of $1,924 or 0.6%. Third Quarter 2003 net sales benefited from successful marketing and promotional programs, including pre-Halloween sales programs. However, net sales for nine months 2003 did not overcome the first half sales decline which was adversely affected by the sluggish economy, a difficult retail environment, and lower sales in Mexico and Canada. Selective price increases aided sales results in the third quarter and nine month 2003 periods; however, increased trade promotions and sales discounts, which are reported as a reduction in net sales, mitigated some of the benefit of the sales price increases. COST OF SALES: Cost of Sales as a Third Quarter Percentage of Net Sales 2003 2002 3rd Qtr. 2003 3rd Qtr. 2002 $84,818 $84,338 57.6% 57.6% Cost of Sales as a Nine Months Percentage of Net Sales 2003 2002 Nine Months 2003 Nine Months 2002 $168,943 $168,874 56.2% 55.8% -6- Cost of sales as a percentage of net sales was 57.6% for both third quarter 2003 and third quarter 2002. This reflects the benefits of selective sales price increases and product weight declines (indirect price increase) which were substantially offset by higher ingredient costs. Nine month cost of sales as a percentage of net sales increased from 55.8% in 2002 to 56.2% in 2003. The increase in nine month 2003 cost of sales as a percentage of sales for the comparative prior year nine month period reflects the effects of higher ingredient costs which were mitigated by sales price increases as discussed above; lower net sales against generally fixed plant overhead costs for the comparative nine month periods also adversely affected cost of sales. 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 some of the Company's products in early 2003, additional selling price increases and product weight declines (indirect selling price increases) on certain items were phased-in throughout the nine month 2003 period in order to further recoup these higher costs. NET EARNINGS: Third Quarter, 2003 Third Quarter vs. 2003 2002 Third Quarter, 2002 $26,945 $26,616 +1.2 % Nine Months, 2003 Nine Months vs. 2003 2002 Nine Months, 2002 $50,171 $51,704 -3.0% Third quarter earnings from operations were $39,815 and $39,361 in 2003 and 2002, respectively, an increase of $454 or 1.2%. Improved third quarter 2003 earnings from operations are the result of higher reported net sales and ongoing cost control programs. Although selective sales price increases contributed to the third quarter sales increase, increased trade promotions and sales discounts, which are reported as a reduction in net sales, mitigated some of the benefits of such sales price increases. Nine months earnings from operations were $73,090 and $75,402 in 2003 and 2002, respectively, a decrease of $2,312 or 3.1%. The decrease in nine months 2003 operating earnings is attributed to lower reported net sales and higher ingredient costs as discussed above, as well as higher advertising expense. In addition, nine months 2003 results reflect a $500 pre-tax provision relating to a customer bankruptcy in first half 2003. -6A- Third quarter 2003 net earnings were $26,945 compared to third quarter 2002 net earnings of $26,616. Third quarter 2003 earnings per share were $0.52, compared to $.50 per share in third quarter 2002, an increase of $.02 or 4.0%. Nine months 2003 net earnings were $50,171 compared to nine months 2002 net earnings of $51,704. Nine months 2003 earnings per share were $.97, unchanged from $.97 for the comparative 2002 period. Net earnings per share in third quarter and nine months 2003 benefited from share repurchases which resulted in a slight reduction in average shares outstanding. Lower investment income, reflecting lower interest rates, adversely affected third quarter and nine months 2003 net earnings as compared to the corresponding 2002 periods. The consolidated effective income tax rate was 33.8% in both the third quarter 2003 and 2002. The effective income tax rate favorably decreased from 34.1% in the nine month 2002 period to 33.8% in the nine month 2003 period. This improvement generally reflects a reduction in state income taxes. LIQUIDITY AND CAPITAL RESOURCES: The Company's current ratio (current assets divided by current liabilities) is 3.0 to 1 as of the end of third quarter 2003 as compared to 3.2 to 1 as of third quarter 2002 and 3.6 to 1 as of fourth quarter 2002. Net working capital was $188,412 as of the end of third quarter 2003 as compared to $176,143 and $161,852 as of the end of third quarter 2002 and fourth quarter 2002, respectively. The increase in working capital at the end of third quarter 2003 compared to third quarter 2002 principally reflects the reinvestment of earnings and cash flows during the twelve month period into cash equivalents and short-term investments. The increase in working capital at the end of third quarter 2003 compared to the fourth quarter 2002 principally relates to the seasonal increase in accounts receivable as a result of the pre-Halloween selling period in the third quarter. Long-term investments were $104,591 as of the third quarter 2003 compared to $116,501 and $103,608 as of the end of the fourth quarter 2002 and third quarter 2002, respectively. Net cash provided by operating activities was $27,201 for nine months 2003 compared to $8,056 for the prior year nine month 2002 period. This change primarily reflects changes in inventories, prepaid expenses and other assets, and income taxes payable and deferred. Capital expenditures for 2003 are anticipated 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. -6B- Investments in debt securities that matured during the nine months 2003 and 2002 were generally replaced with debt securities with maturities greater than one year. During the third quarter 2003, the Company transferred approximately $26 million of investments to a new money manager in order to better diversify its investment portfolio. The aforementioned also had the effect of reclassifying $26 million of investments from "held to maturity" to "available for sale". This change is not expected to have material effect on the Company's financial position or reported net earnings. The Company repurchased and retired $28,332 and $14,412 of its shares outstanding during the nine months 2003 and 2002, respectively. These share repurchases resulted in a slight reduction in shares outstanding in the 2003 quarter and nine month period. 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 preferences, 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. 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. -6C- 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 as of September 27, 2003 and, based on their evaluation, the chief executive officer and chief financial officer have concluded that these controls and procedures are effective. 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. There has been no change in the Company's internal control over financial reporting that occurred during the Company's fiscal quarter ended September 27, 2003 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. -6D- 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 6. EXHIBITS AND REPORTS ON FORM 8-K (a) 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. (b) Form 8-K was furnished on July 23, 2003 containing a press release announcing second 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: Nov. 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 CERTIFICATION I, Melvin J. Gordon, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Tootsie Roll Industries, Inc,; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the state- ments made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial infor- mation included in this 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 report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: Designed such disclosure controls and procedures, or caused such dis- closure controls and procedures to be designed under our supervision, 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 report is being prepared; Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors: All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 7, 2003 By: /S/ MELVIN J. GORDON_______________ Melvin J. Gordon Chairman and Chief Executive Officer -7A- Exhibit 31.2 CERTIFICATION I, G. Howard Ember, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Tootsie Roll Industries, Inc,; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the state- ments made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial infor- mation included in this 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 report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: Designed such disclosure controls and procedures, or caused such dis- closure controls and procedures to be designed under our supervision, 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 report is being prepared; Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors: All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 7, 2003 By: /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 September 27, 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: Nov. 07, 2003 /S/ MELVIN J GORDON____ MELVIN J GORDON Chairman and Chief and Executive Officer Dated: Nov. 07, 2003 /S/ G. HOWARD EMBER, JR. G. Howard Ember, Jr. V.P./Finance and Chief Financial Officer -7C- -----END PRIVACY-ENHANCED MESSAGE-----