-----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, H3vHmEsA6XwhNikVPXuwcLo+ZT6asZJ3F71QZgqX7m6XOMfRxlHU3YufOdU7qq7n DdG/4jtqXyAENZVnrFdCDQ== 0000098677-04-000010.txt : 20040512 0000098677-04-000010.hdr.sgml : 20040512 20040512154003 ACCESSION NUMBER: 0000098677-04-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040403 FILED AS OF DATE: 20040512 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: 04799346 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 mar2004filingc.txt TOOTSIE ROLL INDUSTRIES, INC. 10-Q ENDING 4/3/04 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 APRIL 3, 2004 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 (April 3, 2004) Class Outstanding Common Stock, $.69 4/9 par value 34,933,435 Class B Common Stock, $.69 4/9 par value 17,645,364 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES APRIL 3, 2004 INDEX Page No. Part I - Financial Information Item 1. Financial Statements: Condensed Consolidated Statements of Financial Position 2 Condensed Consolidated Statements of Earnings, Comprehensive Earnings and Retained Earnings 3 Condensed 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 Item 3. Quantitative and Qualitative Disclosures About Market Risk 6B Item 4. Controls and Procedures 6C Part II - Other Information Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities. 7 Item 6. Exhibits and reports on Form 8-K 7 Signatures 7 Certifications 7A-B ITEM 1. FINANCIAL INFORMATION TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands of dollars) (UNAUDITED) ASSETS April 03, March 29, Dec. 31, CURRENT ASSETS 2004 2003 2003____ Cash & cash equivalents $ 52,942 $ 59,895 $ 84,084 Investments 89,348 47,888 86,961 Trade accounts receivable, Less allowances of $2,009, $2,745 & $1,970 20,837 28,587 18,131 Other receivables 4,223 3,825 3,076 Inventories, at cost Finished goods & work in process 37,669 32,919 28,969 Raw material & supplies 19,138 20,896 17,117 Prepaid expenses 15,707 12,570 4,416 Deferred income taxes 951 4,481 951 Total current assets 240,815 211,061 243,705 PROPERTY, PLANT & EQUIPMENT, (at cost) Land 8,268 8,284 8,265 Buildings 44,968 43,909 44,960 Machinery & equipment 209,929 198,899 206,697 263,165 251,092 259,922 Less-accumulated depreciation 133,532 122,676 130,759 Net property, plant and equipment 129,633 128,416 129,163 OTHER ASSETS Goodwill 38,151 38,151 38,151 Trademarks 79,348 79,348 79,348 Investments 120,705 131,916 112,431 Split dollar officer life insurance 62,861 58,262 62,499 301,065 307,677 292,429 Total assets $671,513 $647,154 $665,297 -2- (The accompanying notes are an integral part of these statements.)
(in thousands except per share data) (UNAUDITED) LIABILITY AND SHAREHOLDERS' EQUITY April 03, March 29, Dec. 31, CURRENT LIABILITIES 2004 2003 2003____ Accounts payable $ 14,614 $ 13,764 $ 11,947 Dividends payable 400 3,607 3,589 Accrued liabilities 37,562 36,187 38,834 Income taxes payable 13,714 16,671 8,517 Total current liabilities 66,290 70,229 62,887 NON-CURRENT LIABILITIES Industrial development bonds 7,500 7,500 7,500 Postretirement health care and life Insurance benefits 9,510 8,317 9,302 Deferred compensation and other liabilities 27,446 21,112 26,396 Deferred income taxes 22,680 19,833 22,631 Total non-current liabilites 67,136 56,762 65,829 Total liabilities 133,426 126,991 128,716 SHAREHOLDERS' EQUITY Common Stock, $.69-4/9 par value- 120,000, shares authorized 34,933, 34,794 & 34,082 respectively, issued 24,259 24,162 23,668 Class B common stock, $.69-4/9 par value- 40,000, shares authorized 17,645, 17,259 & 17,145, respectively, issued 12,254 11,985 11,906 Capital in excess of par value 407,759 383,580 357,922 Retained earnings 107,345 113,498 156,786 Accumulated other comprehensive earnings (loss) (11,538) (11,070) (11,709) Treasury stock (at cost)- 58, 58 & 58, shares respectively (1,992) (1,992) (1,992) Total shareholders' equity 538,087 520,163 536,581 Total liabilities and Shareholders' equity $671,513 $647,154 $665,297 -2A- (The accompanying notes are an integral part of these statements.)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS (NOTE 1) (in thousands except per share amounts) (UNAUDITED) FIRST QUARTER ENDED April 03, 2004 & March 2003 Net sales $ 80,046 $ 75,570 Cost of goods sold 45,316 42,969 Gross margin 34,730 32,601 Selling, marketing and administrative expense 18,670 17,528 Earnings from operations 16,060 15,073 Other income, net 1,275 1,407 Earnings before income taxes 17,335 16,480 Provision for income taxes 5,842 5,571 Net earnings 11,493 10,909 Other comprehensive income, before tax: Foreign currency translation adjustments 79 (322) Unrealized losses on securities: (60) (55) Unrealized gains on derivatives: 203 538 Other comprehensive income, before tax 222 161 Income tax (expense) related to items of other comprehensive income (51) (179) Other comprehensive income (loss), net of tax 171 (18) Comprehensive earnings $ 11,664 $ 10,891 Retained earnings at beginning of period $156,786 $148,705 Net earnings 11,493 10,909 Cash dividends (3,575) (3,545) Stock dividends - 3% (57,359) (42,571) Retained earnings at end of period $107,345 $113,498 Net earnings per share (note 2) $.22 $.20 Dividends per share * $.07 $.07 Average number of shares outstanding 52,596 53,751 *Does not include 3% stock dividend to shareholders of record on 3/02/04 and 3/04/03. -3- (The accompanying notes are an integral part of the statements.)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of dollars) (UNAUDITED) FIRST QUARTER ENDED April 3, 2004 & March 29, 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 11,493 $ 10,909 Adjustments to reconcile net earnings to Net cash provided by operating activities: Depreciation and amortization 2,754 2,663 Amortization/accretion of marketable securities 662 583 Purchase of trading securities (1,521) (1,714) (Increase) decrease in assets: Accounts receivable (2,686) (5,977) Other receivables (1,019) 585 Inventories (10,704) (10,245) Prepaid expenses and other assets (11,649) (8,768) Increase (decrease) in liabilities: Accounts payable and accrued liabilities 1,383 1,668 Income taxes payable and deferred 5,247 5,663 Postretirement health care and life insurance benefits 208 166 Deferred compensation and other liabilities 347 497 Other (64) (45) Net cash used in operating activities (5,549) (4,015) CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (3,191) (2,364) Purchase of held to maturity securities (8,155) (25,034) Maturity of held to maturity securities 8,250 3,523 Purchase of available for sale securities (33,079) (6,612) Sale and maturity of available for sales securities 23,928 6,330 Net cash used in investing activities (12,247) (24,157) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid in cash (7,164) (3,575) Shares repurchased and retired (6,182) (13,865) Net cash used in financing activities (13,346) (17,440) Decrease in cash and cash equivalents (31,142) (45,612) Cash and cash equivalents-beginning of year 84,084 105,507 Cash and cash equivalents end of quarter $ 52,942 $ 59,895 Supplemental cash flow information: Income taxes paid $ 639 $ 1,885 Interest paid $ 81 $ 87 Stock dividend issued $ 56,959 $ 42,513 (The accompanying notes are an integral part of the statements) -4-
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS APRIL 3, 2004 (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 2003 Annual Report on Form 10-K. Note 2 - Average shares outstanding for the period ended April 3, 2004 reflects stock repurchases of 170 shares for $6,182 and a 3% stock dividend distributed on April 14, 2004. Average shares outstanding for the period ended March 29, 2003 reflects stock repurchases of 473 shares for $13,865 and a 3% stock dividend distributed on April 16, 2003. Note 3 - Results of operations for the period ended April 3, 2004 are not necessarily indicative of results to be expected for the year to end December 31, 2004 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 - The Company's quarterly financial reporting is based on 13 week periods ending on the last Saturday of each period while its annual reporting is based on the twelve months ending December 31st of the calendar year. This quarterly reporting requires that the Company periodically reset its quarter-end dates to maintain 13-week quarterly reporting periods during its calendar year. As a result, the first quarter 2004 and 2003 periods ended on April 3, 2004 and March 29, 2003, respectively. If first quarter 2004 had ended on March 29, 2004 instead of April 3, 2004, the Company estimates that first quarter 2004 net sales would have been approximately $2,900 less than the reported 2004 sales amount. -5- Note 5 - In January 2004, the FASB issued Staff Position No. 106-1, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003" (FSP 106-1). The company has elected to defer Accounting for the effects of the Act, as permitted by FSP 106-1. Accordingly, the company's accumulated postretirement benefit obligation and net postretirement health care costs included in the consolidated financial statements and accompanying notes do not reflect the effects of the Act. Specific authoritative guidance on the accounting for the federal subsidy is pending and that guidance, when issued, could require the company to change previously reported information. The Company is not aware of any other new accounting and reporting pronouncements issued by the FASB or other regulatory bodies that are 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 The following is management's discussion of the company's operating results and analysis of factors that have affected the accompanying Condensed Statement of Earnings. NET SALES: First Quarter, 2004 First Quarter vs. 2004 2003 First Quarter, 2003 $80,046 $75,570 +5.9% First quarter 2004 net sales were $80,046 compared to $75,570 in first quarter 2003, an increase of $4,476 or 6%. The Company's quarterly financial reporting is based on 13 week periods ending on the last Saturday of each period while its annual reporting is based on the twelve months ending December 31st of the calendar year. This quarterly reporting requires that the Company periodically reset its quarter-end dates to maintain 13-week quarterly reporting periods during its calendar year. As a result, the first quarter 2004 and 2003 periods ended on April 3, 2004 and March 29, 2003, respectively. If first quarter 2004 had ended on March 29, 2004 instead of April 3,2004, the Company estimates that first quarter 2004 net sales would have been approximately $2,900 less than the above reported 2004 sales amount. Effective marketing programs as well as the timing of the quarter end reporting period as discussed above contributed to the overall sales increase in first quarter 2004. With the exception of increased trade promotions and discounts, which are accounted for as a reduction of sales, the increase in sales is attributable to increased sales volume. First quarter 2004 net sales of $80,046 were down from fourth quarter 2003 net sales of $92,160. This is not considered unusual, as the first quarter of the year is historically the Company's lowest sales quarter. COST OF SALES: Cost of Sales as a First Quarter Percentage of Net Sales 2004 2003 1st Qtr. 2004 1st Qtr. 2003 $45,316 $42,969 56.6% 56.9% Cost of sales as a percentage of net sales favorably decreased from 56.9% in first quarter 2003 to 56.6% in first quarter 2004. This gross profit improvement principally reflects lower ingredient costs. -6- NET EARNINGS: First Quarter, 2004 First Quarter vs. 2004 2003 First Quarter, 2003 $11,493 $10,909 +5.4% First Quarter earnings from operations were $16,060 and $15,073 in 2004 and 2003, respectively, an increase of $987 or 6.5%. The increase in operating earnings principally results from lower ingredient costs and higher sales as discussed above, however, higher trade promotion and discounts mitigated the benefits of lower ingredient costs. Selling, marketing and administrative expenses increased from $17,528 in first quarter 2003 to $18,670 in first quarter 2004, an increase of $1,142 or 6.5%. However, the aforementioned expenses as a percentage of net sales were 23.3% and 23.2% in first quarter 2004 and 2003, respectively. First Quarter 2004 net earnings were $11,493 compared to First Quarter 2003 net earnings of $10,909. First Quarter 2004 earnings per share were $0.22, compared to $.20 per share in the prior year comparative period, an increase of $.02 or 10.0%. In addition to the factors discussed above earnings per share benefited from fewer shares outstanding as a result of the Company's share repurchases. The consolidated effective income tax rate favorably decreased from 33.8% in first quarter 2003 to 33.7% in first quarter 2004. This improvement generally reflects a reduction in state and foreign income taxes. LIQUIDITY AND CAPITAL RESOURCES: The Company's current ratio (current assets divided by current liabilities) is 3.6 to 1 as of the end of first quarter 2004 as compared to 3.0 to 1 as of the end of first quarter 2003 and 3.9 to 1 as of the end of fourth quarter 2003. Net working capital was $174,525 as of the end of first quarter 2004 as compared to $180,818 and $140,832 as of the end of fourth quarter 2003 and first quarter 2003, respectively. The aforementioned net working capital amounts are principally reflected in aggregate cash and cash equivalents and short-term investments which were $142,290 as of the end of first quarter 2004 compared to $171,045 and $107,783, as of the end of fourth quarter 2003 and first quarter 2003, respectively. In addition, long-term investments, principally debt securities comprising municipal bonds, were $120,705 as of the end of first quarter 2004 as compared to $112,431 and $131,916 as of the end of fourth quarter 2003 and first quarter 2003, respectively. Investments in municipal bonds and other debt securities that matured during first quarters 2004 and 2003 were generally replaced with debt securities of similar maturities. -6A- Net cash used in operating activities was $5,549 for first quarter 2004 compared to $4,015 for first quarter 2003. The net cash used in operating activities reflects the Company's historical build-up of inventories and the pre-funding of the annual cost of certain defined contribution employee benefit plans. Capital expenditures for the first quarter 2004 and 2003 were $3,191 and $2,364, respectively. Capital expenditures for the 2004 year 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. Cash dividends declared in first quarter 2004 and 2003 were $3,575 and $3,545, respectively. However, dividends paid in cash were $7,164 and $3,575, in first quarter 2004 and 2003, respectively. The aforementioned increase in dividends paid reflects the timing of the payment of the first quarter and preceding fourth quarter dividends in the comparative periods. The Company repurchased and retired $6,182 and $13,865 of its shares outstanding during first quarter 2004 and 2003, 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 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 actions taken by major retailers and customers; 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, 2003. -6B- Item 4. CONTROLS AND PROCEDURES As of April 3, 2004, the Company's Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the company's disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of April 3, 2004. Additionally, there have been no significant changes in the Company's internal controls that could significantly affect these controls subsequent to April 3, 2004, including any corrective actions with regard to significant deficiencies and material weaknesses. -6C- PART II - OTHER INFORMATION TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities. (c) Total Number of (d) Maximum Number (or (a) Total (b) Average Shares Approximate Dollar Value) of Number of Price Paid per Purchased as Part of Shares that May Yet Shares Share Publicly Announced Plans Be Purchased Under the Plans Period Purchased Or Programs Or Programs _____ JAN 1 TO JAN 31 104,500 $ 36.26 NOT APPLICABLE NOT APPLICABLE FEB 1 TO FEB 29 -0- MAR 1 TO APR 3 65,800 36.27 NOT APPLICABLE NOT APPLICABLE TOTAL 170,300 $ 36.27 While the company does not have a formal or publicly announced stock repurchase program, the company's board of directors does authorizes a dollar amount for the annual share repurchases. The treasurer executes share repurchase transactions according to these guidelines. 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 February 12, 2004 and April 27, 2004 containing a press release announcing earnings for fourth quarter 2003 and first quarter 2004, respectively. 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 12, 2004 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 statements 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: a) 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; b) 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 c) 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: a) 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 b) 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: May 12, 2004 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 statements 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: a) 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; b) 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 c) 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: a) 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 b) 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: May 12, 2004 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 April 3, 2004 (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: May 12, 2004 /S/MELVIN J GORDON MELVIN J GORDON Chairman and Chief and Executive Officer Dated: May 12, 2004 /S/G. HOWARD EMBER, JR. G. Howard Ember, Jr. V.P./Finance and Chief Financial Officer -7C- -----END PRIVACY-ENHANCED MESSAGE-----