-----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, FHljmD17EpGEE9NxtHKDdVbK3vBi6ioOigf203vl/pq+CxsaOLss6bBDZMUhygpN UZR4iruMyopcFWcYsR9LMA== 0000098677-04-000016.txt : 20040806 0000098677-04-000016.hdr.sgml : 20040806 20040806152446 ACCESSION NUMBER: 0000098677-04-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040703 FILED AS OF DATE: 20040806 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: 04957895 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 jun2004filing.txt TOOTSIE ROLL INDUSTRIES, INC. 10-Q ENDING 7/3/04 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 JULY 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 (July 3, 2004) Class Outstanding Common Stock, $.69 4/9 par value 34,660,933 Class B Common Stock, $.69 4/9 par value 17,614,016 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES JULY 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 Condensed 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 6C 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 4. Submission of Matters to a Vote of Security Holders 7 Item 6. Exhibits and Reports on Form 8-K 7 Signatures 7A Certifications 7B-D PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands of dollars) (UNAUDITED) ASSETS July 3, June 28, Dec. 31, CURRENT ASSETS 2004 2003 2003____ Cash & cash equivalents $ 59,750 $ 54,354 $ 84,084 Investments 62,130 58,876 86,961 Trade accounts receivable, Less allowances of $2,020, $2,070 & $1,970 21,837 20,591 18,131 Other receivables 3,014 3,104 3,076 Inventories, at cost Finished goods & work in process 55,821 53,089 28,969 Raw material & supplies 21,737 20,926 17,117 Prepaid expenses 11,204 9,196 4,416 Deferred income taxes 951 4,481 951 Total current assets 236,444 224,617 243,705 PROPERTY, PLANT & EQUIPMENT, (at cost) Land 8,254 8,299 8,265 Buildings 44,925 43,953 44,960 Machinery & equipment 213,781 202,812 206,697 266,960 255,064 259,922 Less-accumulated depreciation 136,280 125,814 130,759 Net property, plant and equipment 130,680 129,250 129,163 OTHER ASSETS Goodwill 38,151 38,151 38,151 Trademarks 79,348 79,348 79,348 Investments 126,135 128,177 112,431 Split dollar officer life insurance 66,043 58,260 62,499 309,677 303,936 292,429 Total assets $676,801 $657,803 $665,297 -2- (The accompanying notes are an integral part of these statements)
(in thousands except per share data) (UNAUDITED) LIABILITIES AND SHAREHOLDERS' EQUITY July 3, June 28, Dec. 31, CURRENT LIABILITIES 2004 2003 2003____ Accounts payable $ 11,752 $ 13,122 $ 11,947 Dividends payable 3,666 3,627 3,589 Accrued liabilities 39,076 37,804 38,834 Income taxes payable 18,941 22,329 8,517 Total current liabilities 73,435 76,882 62,887 NON-CURRENT LIABILITIES Industrial development bonds 7,500 7,500 7,500 Postretirement health care and life insurance benefits 9,671 8,512 9,302 Deferred compensation and other liabilities 27,385 23,222 26,396 Deferred income taxes 22,896 19,775 22,631 Total non-current liabilities 67,452 59,009 65,829 Total liabilities 140,887 135,891 128,716 SHAREHOLDERS' EQUITY Common stock, $.69-4/9 par value- 120,000 shares authorized; 34,661, 34,572 & 34,082 respectively, issued 24,070 24,008 23,668 Class B common stock, $.69-4/9 par value- 40,000 shares authorized; 17,614, 17,233 & 17,145 respectively, issued 12,232 11,967 11,906 Capital in excess of par value 397,745 376,405 357,922 Retained earnings 115,512 122,191 156,786 Accumulated other comprehensive earnings (loss) (11,653) (10,667) (11,709) Treasury stock (at cost)- 58, 58 & 58 shares respectively (1,992) (1,992) (1,992) Total shareholders' equity 535,914 521,912 536,581 Total liabilities and Shareholders' equity $676,801 $657,803 $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 (in thousands except per share amounts) (UNAUDITED) 13 Weeks Ended July 3, 2004 & June 28,2003 Net sales $ 77,157 $ 77,725 Cost of goods sold 42,165 42,184 Gross margin 34,992 35,541 Selling, marketing and administrative expense 18,173 18,367 Earnings from operations 16,819 17,174 Other income, net 1,021 1,432 Earnings before income taxes 17,840 18,606 Provision for income taxes 6,012 6,289 Net earnings 11,828 12,317 Other comprehensive income, before tax: Foreign currency translation adjustments (472) 501 Unrealized (losses) gains on securities (211) 330 Unrealized gains (losses) on derivatives 776 (486) Other comprehensive income before tax 93 345 Income tax (expense) benefit related to items of other comprehensive income (209) 58 Other comprehensive (loss) income, net of tax (116) 403 Comprehensive earnings $ 11,712 $ 12,720 Retained earnings at beginning of period $107,345 $113,498 Net earnings 11,828 12,317 Cash dividends (3,661) (3,624) Retained earnings at end of period $115,512 $122,191 Net earnings per share (note 2) $.23 $.23 Dividends per share * $.07 $.07 Average number of shares outstanding 52,397 53,413 *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 EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS (in thousands except per share amounts) (UNAUDITED) 26 Weeks Ended July 3, 2004 & June 28,2003 Net sales $157,203 $153,295 Cost of goods sold 87,481 85,153 Gross margin 69,722 68,142 Selling, marketing and administrative expense 36,843 35,895 Earnings from operations 32,879 32,247 Other income, net 2,296 2,839 Earnings before income taxes 35,175 35,086 Provision for income taxes 11,854 11,860 Net earnings 23,321 23,226 Other comprehensive income, before tax: Foreign currency translation adjustments (393) 179 Unrealized (losses) gains on securities (271) 275 Unrealized gains on derivatives 979 52 Other comprehensive income before tax 315 506 Income tax related to items of other comprehensive income (260) (121) Other comprehensive income, net of tax 55 385 Comprehensive earnings $ 23,376 $ 23,611 Retained earnings at beginning of period $156,786 $148,705 Net earnings 23,321 23,226 Cash dividends (7,236) (7,169) Stock dividends - 3% (57,359) (42,571) Retained earnings at end of period $115,512 $122,191 Net earnings per share (note 2) $.44 $.43 Dividends per share * $.14 $.14 Average number of shares outstanding 52,493 53,591 *Does not include 3% stock dividend to shareholders of record on 3/02/04 and 3/04/03. -3A- (The accompanying notes are an integral part of the statements)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 26 WEEKS ENDED July 3, 2004 & June 28, 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 23,321 $ 23,226 Adjustments to reconcile net earnings to Net cash provided by operating activities: Depreciation and amortization 5,615 5,791 Amortization of marketable securities 1,333 1,223 Purchase of trading securities (1,776) (2,126) (Increase) decrease in assets: Accounts receivable (3,768) 2,119 Other receivables 680 1,000 Inventories (31,592) (30,324) Prepaid expenses and other assets (10,354) (5,372) Increase (decrease) in liabilities: Accounts payable and accrued liabilities 107 2,570 Income taxes payable and deferred 10,682 11,272 Postretirement health care and life insurance benefits 369 361 Deferred compensation and other liabilities 1,097 494 Other (86) 7 Net cash (used in) provided by operating activities (4,372) 10,241 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (7,282) (6,065) Purchase of held to maturity securities (22,049) (35,941) Maturity of held to maturity securities 32,146 10,066 Purchase of available for sale securities (37,528) (17,746) Sale and maturity of available for sales securities 38,718 16,682 Net cash provided by (used in) investing activities 4,005 (33,004) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid in cash (7,560) (7,178) Shares repurchased and retired (16,407) (21,212) Net cash used in financing activities (23,967) (28,390) Decrease in cash and cash equivalents (24,334) (51,153) Cash and cash equivalents-beginning of year 84,084 105,507 Cash and cash equivalents end of quarter $ 59,750 $ 54,354 Supplemental cash flow information: Income taxes paid $ 1,688 $ 2,756 Interest paid $ 95 $ 117 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 JULY 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 from January 1, 2004 to July 3, 2004 reflects stock repurchases of 474 shares for $16,407 and a 3% stock dividend distributed on April 14, 2004. Average shares outstanding for the period from January 1, 2003 to June 28, 2003 reflects stock repurchases of 721 shares for $21,212 and a 3% stock dividend distributed on April 16, 2003. Note 3 - Results of operations for the 13 and 26 week periods ended July 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 second quarter 2004 and 2003 periods ended on July 3, 2004 and June 28, 2003, respectively. If first half 2004 had ended on June 28, 2004 instead of July 3, 2004, the Company estimates that first half 2004 net sales would have been approximately $2,400 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. The Company does not anticipate the effect of the Act to be significant to the financial statements. The Company is not aware of any other new accounting and reporting pronouncements issued by the FASB or other regulatory bodies that are significant to 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, 2004 Second Quarter vs. 2004 2003 Second Quarter, 2003 $77,157 $77,725 (0.7)% First Half, 2004 First Half vs. 2004 2003 First Half, 2003 $157,203 $153,295 2.5% Second quarter 2004 net sales were $77,157 compared to $77,725 in second quarter 2003, a decrease of $568 or 0.7%. First half 2004 net sales were $157,203 compared to $153,295 in the prior year first half 2003, an increase of $3,908 or 2.5%. 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 Company's first half 2004 and 2003 reporting periods ended on July 3, 2004 and June 28, 2003, respectively. If first half 2004 had ended on June 28, 2004, the Company estimates that first half 2004 net sales would have been approximately $2,400 less than the above reported 2004 sales amount. Because the second quarter of 2004 and 2003 both comprised exactly 13 weeks, the aforementioned did not affect second quarter 2004 and 2003 comparative reported sales. Second quarter 2004 sales were adversely affected by the timing of certain customer shipments, which resulted in approximately $2,200 of comparable customer sales in second quarter 2003 being delivered and recorded as sales in third quarter 2004. COST OF SALES: Cost of Sales as a Second Quarter Percentage of Net Sales 2004 2003 2nd Qtr. 2004 2nd Qtr. 2003 $42,165 $42,184 54.6% 54.3% Cost of Sales as a First Half Percentage of Net Sales 2004 2003 1st Half 2004 1st Half 2003 $87,481 $85,153 55.6% 55.5% -6- Cost of sales as a percentage of net sales increased slightly from 54.3% for second quarter 2003 to 54.6% for second quarter 2004, an increase of 0.3% as a percentage of sales. First half cost of sales as a percentage of net sales also increased slightly from 55.5% in 2003 to 55.6% in 2004, an increase of 0.1% as a percentage of sales. With the exception of vegetable oil, the Company has generally experienced lower ingredient costs for most of its principal ingredients, including sugar, corn syrup, cocoa and chocolate. However, such cost reductions were generally offset by higher manufacturing labor and plant overhead costs. NET EARNINGS: Second Quarter, 2004 Second Quarter vs. 2004 2003 Second Quarter, 2003 $11,828 $12,317 (4.0)% First Half, 2004 First Half vs. 2004 2003 First Half, 2003 $23,321 $23,226 0.4% Second quarter earnings from operations were $16,819 and $17,174 in 2004 and 2003, respectively, a decrease of $355 or 2.1%. First half earnings from operations were $32,879 and $32,247 in 2004 and 2003, respectively, an increase of $632 or 2.0%. Selling, marketing and administrative expenses decreased from $18,367 in second quarter 2003 to $18,173 in second quarter 2004, a decrease of $194 or 1.1%. However, first half selling, marketing and administrative expenses increased from $35,895 in 2003 to $36,843 in 2004, an increase of $948 or 2.6%. The aforementioned increase in expenses principally reflects the 2.5% sales increase for first half 2004. Selling, marketing and administrative expenses as a percentage of net sales were 23.6% in both second quarter 2004 and 2003, and 23.4% in both first half 2004 and 2003, respectively. Earnings from operations for the second quarter and first half periods generally followed the sales, gross profit and operating expense trends for the respective comparative periods as discussed above. Second quarter 2004 net earnings were $11,828 compared to second quarter 2003 net earnings of $12,317, a decrease of 4.0%. Second quarter earnings per share were $0.23 in both 2004 and 2003 second quarter periods. First half 2004 net earnings were $23,321 compared to prior year first half 2003 net earnings of $23,226, an increase of 0.4%. First half 2004 earnings per share were $.44 compared to $.43 in first half 2003, an increase of $.01 or 2%. Lower other income, principally comprising investment income, in the second quarter and first half 2004 periods also impacted net earning for the respective periods. In addition to the factors discussed above, net earnings per share in the second quarter and first half 2004 were aided by share repurchases in the open market which resulted in a slight reduction in average shares outstanding. -6A- The consolidated effective income tax rate was 33.7% in both the second quarter and first half 2004 compared to 33.8% in both the second quarter and first half 2003. 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 3.2 to 1 as of the end of the second quarter 2004 as compared to 2.9 to 1 as of the second quarter 2003 and 3.9 to 1 as of the fourth quarter 2003. Net working capital was $163,009 as of the end of the second quarter 2004 as compared to $147,735 and $180,818 as of the end of the second quarter 2003 and fourth quarter 2003, respectively. Such net working capital amounts are principally reflected in aggregate cash and cash equivalents and short-term investments which were $121,880 as of the end of second quarter 2004 compared to $113,230 and $171,045 as of the end of second quarter 2003 and fourth quarter 2003, respectively. In addition, long-term investments, principally debt securities comprising municipal bonds, were $126,135 as of the end of second quarter 2004 as compared to $128,177 and $112,431 as of the end of second quarter 2003 and fourth quarter 2003, respectively. Investments in municipal bonds and other debt securities that matured during first half 2004 and 2003 were generally replaced with debt securities of similar maturities. Net cash used in operating activities was $4,372 in first half 2004 compared to $10,241 of net cash provided by operations in first half 2003. The net cash used in first half 2004 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, as well as the payments of split dollar insurance premiums. The timing of sales and collections and their effects on changes in beginning and ending accounts receivable balances also contributed to additional cash used in operations in first half 2004 compared to first half 2003. Capital expenditures for the first half 2004 and 2003 were $7,282 and $6,065, 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 paid in first half 2004 and 2003 were $7,560 and $7,178, respectively. The Company repurchased and retired $16,407 and $21,212 of its shares outstanding during first half 2004 and 2003, respectively. -6B- 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, 2003. 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 the end of the period covered by this 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 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, Use of Proceeds and Issuer Purchases of Equity Securities. (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 APR 4 TO MAY 1 17,600 $ 35.22 NOT APPLICABLE NOT APPLICABLE MAY 2 TO MAY 29 157,700 33.80 NOT APPLICABLE NOT APPLICABLE MAY 30 TO JUL 3 128,550 33.15 NOT APPLICABLE NOT APPLICABLE TOTAL 303,850 $ 33.61 While the Company does not have a formal or publicly announced stock repurchase program, the company's board of directors periodically authorizes a dollar amount for share repurchases. The treasurer executes share repurchase transactions according to these guidelines. Item 4. Submission of Matters to a Vote of Security Holders At the Annual Meeting of Shareholders of the Company, held on May 3, 2004, 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 194,703,733 4,967,963 -0- -0- Ellen R. Gordon 194,714,995 4,956,701 -0- -0- Lana Jane Lewis-Brent 199,167,345 504,351 -0- -0- Charles W. Siebert 199,204,549 467,147 -0- -0- Richard P. Bergeman 198,889,688 782,008 -0- -0- 2. Proposal to ratify the appointment of PricewaterhouseCoopers LLP as auditors for the fiscal year 2004: Broker For Withheld Abstain Non-Vote Common Shares and Class B Common Shares voting together 199,001,943 582,593 87,160 -0- No other matters were submitted to a vote by ballot at the 2004 Annual Meeting. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 31.1 and 31.2 - Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (b) Exhibit 32 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (c) Form 8-K was furnished on April 27, 2004 and July 28, 2004 containing a press release announcing earnings for first and second quarter 2004, respectively. -7-
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. 06, 2004 BY: /S/MELVIN J. GORDON Melvin J. Gordon Chairman of the Board Date: Aug. 06, 2004 BY: /S/HOWARD EMBER, JR. G. Howard Ember, Jr. Vice President - Finance -7A- 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: 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: Aug 06, 2004 By: /S/MELVIN J. GORDON Melvin J. Gordon Chairman and Chief Executive Officer -7B- 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: d) 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; e) 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 f) 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: c) 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 d) 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: Aug 06, 2004 By: /S/G. HOWARD EMBER, JR. G. Howard Ember, Jr. Vice President/Finance and Chief Financial Officer -7C- 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 July 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: Aug 06, 2004 /S/MELVIN J GORDON MELVIN J GORDON Chairman and Chief and Executive Officer Dated: Aug 06, 2004 /S/G. HOWARD EMBER, JR. G. Howard Ember, Jr. V.P./Finance and Chief Financial Officer -7D- -----END PRIVACY-ENHANCED MESSAGE-----