UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report:
(Date of earliest event reported)
(Exact name of registrant as specified in its charter)
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(Address of principal executive offices)
Registrant’s telephone number including area code: (
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(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
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| Name of each exchange on which registered: |
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Item 2.02. Results of Operations and Financial Condition.
On July 23, 2020, Tootsie Roll Industries, Inc. issued a press release (the "release") announcing its results of operations and financial condition for the second quarter ended June 30, 2020. A copy of the release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information in the release and in this Item 2.02 is "furnished" and not "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, or otherwise subject to the liabilities of that section. Such information may only be incorporated by reference in another filing under the Securities Exchange Act of 1934 or the Securities Act of 1933 only if and to the extent such subsequent filing specifically references such information.
Item 9.01. Financial Statements and Exhibits.
(c) The following exhibit is furnished with this report:
Exhibit 99.1 | Press Release of Tootsie Roll Industries, Inc., dated July 23, 2020. |
Exhibit 104 | Cover Page Interactive Data File (formatted as inline XBRL). |
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SIGNATURE
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 under-signed thereunto duly authorized.
July 23, 2020 | TOOTSIE ROLL INDUSTRIES, INC. | |
By: | /S/ G. HOWARD EMBER, JR. | |
G. Howard Ember, Jr. | ||
Vice President Finance and Chief Financial Officer | ||
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Exhibit 99.1
TOOTSIE ROLL INDUSTRIES, INC. | |
| 7401 South Cicero Avenue |
| Chicago, IL 60629 |
| Phone 773/838-3400 |
| Fax 773/838-3534 |
PRESS RELEASE
STOCK TRADED: NYSE | FOR IMMEDIATE RELEASE |
TICKER SYMBOL: TR | Thursday, July 23, 2020 |
CHICAGO, ILLINOIS – July 23, 2020 - Ellen R. Gordon, Chairman, Tootsie Roll Industries, Inc. reported second quarter and first half 2020 net sales and net earnings.
Second quarter 2020 net sales were $79,796,000 compared to $106,021,000 in second quarter 2019, a decrease of $26,225,000 or 25%. Second quarter 2020 net earnings were $7,388,000 compared to $11,556,000 in second quarter 2019, and net earnings per share were $0.11 and $0.17 in second quarter 2020 and 2019, respectively, a decrease of $0.06 per share or 35%.
First half 2020 net sales were $182,599,000 compared to $207,040,000 in first half 2019, a decrease of $24,441,000 or 12%. First half 2020 net earnings were $19,370,000 compared to $20,511,000 in first half 2019, and net earnings per share were $0.29 and $0.30 in first half 2020 and 2019, respectively, a decrease of $0.01 per share or 3%.
Mrs. Gordon said, “Second quarter sales were adversely impacted by the Covid-19 pandemic, including the closure of “nonessential” business, “shelter-in-place” mandates and public health guidelines issued by state, local, federal and foreign governments. The “closing” of the economy, and its gradual “reopening”, has curtailed and at times completely closed certain channels of trade where the Company has historically sold its products. Response to this pandemic has resulted in the disruption and changes in lifestyles and shopping habits which has adversely affected planned consumer purchases of the Company’s products for “sharing” and “give away” occasions, as well as impulse purchases of the Company’s products at retail outlets.
The above discussed sales decline and resulting lost profit margin was the principal driver of the decline in net earnings in second quarter 2020 compared to second quarter 2019. In addition, lower sales and production volumes had an unfavorable impact on plant manufacturing overhead costs and resulting gross profit margins because these costs are primarily fixed and recurring each year, and only partially decline with lower volumes. Certain cost and expense reductions, which include Company initiatives to reduce costs, did provide some benefit to second quarter 2020 results.
First half 2020 sales were principally impacted by the sales decline in the second quarter as first quarter 2020 sales were up 2% over first quarter 2019 sales. First half 2020 net earnings were also adversely affected by the same factors that impacted the second quarter 2020 results as discussed above. First half 2020 net earnings did benefit from foreign exchange after-tax gains of approximately $1,260,000 or $0.02 per share, whereas the prior year first half 2019 net earnings were adversely affected by foreign exchange after-tax losses of approximately $339,000.
The Company’s effective income tax rate was 27.8% and 25.8% in second quarter 2020 and 2019, respectively, and 24.0% and 25.2% in first half 2020 and 2019, respectively. Earnings per share benefited from stock purchases in the open market resulting in fewer shares outstanding in both second quarter and first half 2020.
The Company is well positioned to return to higher sales and profits when the adverse effects of the Covid-19 pandemic subside. We are focused on the longer term and therefore are continuing to make investments in plant manufacturing operations to meet new consumer and customer demands, achieve product quality improvements, increase operational efficiencies and provide genuine value to consumers.
Due to the adverse effects of the Covid-19 pandemic on the Company’s business and the overall economy, the Company has continued to experience declines in customer orders and sales in third quarter 2020, and expects this trend to adversely affect net earnings in third quarter 2020 and likely in fourth quarter 2020 as well. The effects of Covid-19 pandemic are unprecedented, and therefore the Company is unable to determine its effects on its sales and net earnings for the balance of 2020.”
TOOTSIE ROLL INDUSTRIES, INC.
CONSOLIDATED SUMMARY OF SALES & EARNINGS
FOR THE PERIODS ENDED
JUNE 30, 2020 and 2019
| | Second Quarter Ended | | ||||
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| 2020 |
| 2019 |
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Net Product Sales | | $ | 79,796,000 | | $ | 106,021,000 | |
Net Earnings | | $ | 7,388,000 | | $ | 11,556,000 | |
Net Earnings Per Share* | | $ | 0.11 | | $ | 0.17 | |
Average Shares Outstanding* | | | 66,671,000 | | | 67,501,000 | |
| | Six Months Ended | | ||||
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| 2020 |
| 2019 |
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| | | | | | ||
Net Product Sales | | $ | 182,599,000 | | $ | 207,040,000 | |
Net Earnings | | $ | 19,370,000 | | $ | 20,511,000 | |
Net Earnings Per Share* | | $ | 0.29 | | $ | 0.30 | |
Average Shares Outstanding* | | | 66,781,000 | | | 67,664,000 | |
* Based on average shares outstanding adjusted for 3% stock dividends distributed April 3, 2020 and April 5, 2019.
Document and Entity Information |
Jul. 23, 2020 |
|---|---|
| Document and Entity Information [Abstract] | |
| Document Type | 8-K |
| Document Period End Date | Jul. 23, 2020 |
| Entity Registrant Name | TOOTSIE ROLL INDUSTRIES, INC. |
| Entity Incorporation, State or Country Code | VA |
| Entity File Number | 001-01361 |
| Entity Tax Identification Number | 22-1318955 |
| Entity Address, Address Line One | 7401 South Cicero Avenue |
| Entity Address, City or Town | Chicago |
| Entity Address, State or Province | IL |
| Entity Address, Postal Zip Code | 60629 |
| City Area Code | 773 |
| Local Phone Number | 838-3400 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, par value $0.69-4/9 per share |
| Trading Symbol | TR |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |
| Entity Central Index Key | 0000098677 |
| Amendment Flag | false |
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