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:
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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
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Item 2.02. Results of Operations and Financial Condition.
On July 21, 2021, 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, 2021. 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 21, 2021. |
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 22, 2021 | 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 | Wednesday, July 21, 2021 |
CHICAGO, ILLINOIS – July 21, 2021 - Ellen R. Gordon, Chairman, Tootsie Roll Industries, Inc. reported second quarter and first half 2021 net sales and net earnings.
Second quarter 2021 net sales were $114,560,000 compared to $79,796,000 in second quarter 2020, an increase of $34,764,000 or 44%. Second quarter 2021 net earnings were $9,794,000 compared to $7,388,000 in second quarter 2020, and net earnings per share were $0.14 and $0.11 in second quarter 2021 and 2020, respectively, an increase of $0.03 per share or 27%.
First half 2021 net sales were $216,355,000 compared to $182,599,000 in first half 2020, an increase of $33,756,000 or 18%. First half 2021 net earnings were $20,561,000 compared to $19,370,000 in first half 2020, and net earnings per share were $0.30 and $0.28 in first half 2021 and 2020, respectively, an increase of $0.02 per share or 7%.
Mrs. Gordon said, “Second quarter sales reflect effective sales and marketing programs as the economy continues to recover and “re-open” from the adverse effects of the Covid-19 pandemic. The Covid-19 pandemic curtailed and limited access to certain channels of trade where the Company has historically sold its products. Response to this pandemic 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 the effects of the pandemic subsided throughout first half 2021, the Company had continuing improvement in customer orders and sales. Second quarter 2021 sales also exceeded second quarter 2019 sales by 8% which provides a quarterly sales comparison prior to the pandemic, and first half 2021 sales were 4% ahead of first half 2019 sales.
Our 44% increase in second quarter 2021 sales contributed to a first half 2021 sales increase of 18% compared to first half 2020, and these higher sales were the principal driver of increased net earnings in second quarter and first half 2021. Second quarter and first half 2021 gross profit margins and net earnings were adversely affected by increasing costs for ingredients, packaging materials, freight and delivery, and certain manufacturing supplies. These increased costs and expenses were more pronounced in second quarter 2021, and we expect these costs to remain at elevated levels for the balance of the year and into 2022. In response to these higher costs, the confectionary industry has announced increases in selling prices in order to restore margins, and we have followed with some price increases as well. These price increases will be phased in during the balance of 2021. Second quarter results were also adversely affected by higher than expected sales demand which resulted in additional costs related to our efforts to meet this higher demand.
First half 2021 includes after-tax foreign exchange losses of $176,000 compared to significant after-tax foreign exchange gains of $1,220,000 or $0.02 per share in first half 2020, which adversely affects the comparison of first half 2021 results with 2020. The Company’s effective income tax rates were 25.5% and 27.8% in second quarter 2021 and 2020, respectively, and 24.9% and 24.0% in first half 2021 and 2020, respectively. Earnings per share benefited from stock purchases in the open market resulting in fewer shares outstanding in both second quarter and first half 2021.
We are focused on the longer term and therefore are continuing to make investments in plant manufacturing operations to meet new consumer and customer product demands, achieve product quality improvements, increase operational efficiencies and provide genuine value to consumers. The effects of Covid-19 pandemic, including variants that are continuing to develop, are unprecedented, and therefore the Company is unable to determine the related effects on its sales and net earnings for the balance of 2021.”
Safe Harbor Statement
This release contains forward-looking statements that are based largely on the Company’s current expectations and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as “anticipated,” “believe,” “expect,” “intend,” “estimate,” “project,” “plan” and other words of similar meaning in connection with a discussion of future operating or financial performance and are subject to certain factors, risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. Such factors, risks, trends and uncertainties, which in some instances are beyond the Company’s control, include the overall competitive environment in the Company’s industry, changes in assumptions, judgments and risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2020.
The risk factors referred to above, including the effects of the Covid-19 pandemic, are believed to be significant factors, but not necessarily all of the significant factors that could cause actual results to differ from those expressed in any forward-looking statement. Readers are cautioned not to place undue reliance on such forward-looking statements, which are made only as of the date of this report. The Company undertakes no obligation to update such forward-looking statements.
TOOTSIE ROLL INDUSTRIES, INC.
CONSOLIDATED SUMMARY OF SALES & EARNINGS
FOR THE PERIODS ENDED
JUNE 30, 2021 and 2020
| | Second Quarter Ended | | ||||
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| 2021 |
| 2020 |
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Net Product Sales | | $ | 114,560,000 | | $ | 79,796,000 | |
Net Earnings | | $ | 9,794,000 | | $ | 7,388,000 | |
Net Earnings Per Share* | | $ | 0.14 | | $ | 0.11 | |
Average Shares Outstanding* | | | 67,564,000 | | | 68,641,000 | |
| | Six Months Ended | | ||||
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| 2021 |
| 2020 |
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| | | | | | ||
Net Product Sales | | $ | 216,355,000 | | $ | 182,599,000 | |
Net Earnings | | $ | 20,561,000 | | $ | 19,370,000 | |
Net Earnings Per Share* | | $ | 0.30 | | $ | 0.28 | |
Average Shares Outstanding* | | | 67,705,000 | | | 68,751,000 | |
* Based on average shares outstanding adjusted for 3% stock dividends distributed April 2, 2021 and April 3, 2020.
Document and Entity Information |
Jul. 22, 2021 |
Apr. 21, 2021 |
|---|---|---|
| Document and Entity Information [Abstract] | ||
| Document Type | 8-K | |
| Document Period End Date | Jul. 22, 2021 | |
| 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 |