-----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, Iiw5XvlUJGBJsul4DqC+9DN2jkrmvzsF7g6IUUM+XNlD9aaF+JYFxgezG1SWO4KV k+Et08Miis655lu0KWPSbg== 0000098677-95-000015.txt : 19951119 0000098677-95-000015.hdr.sgml : 19951119 ACCESSION NUMBER: 0000098677-95-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE 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: 95589675 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 TOOTSIE ROLL INDUSTRIES, INC. 10-Q ENDING 09/30/95 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 1995 Commission File Number 1 - 1361 TOOTSIE ROLL INDUSTRIES, INC. (Exact name of registrant as specified in its charter) VIRGINIA 22 - 1318955 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 7401 South Cicero Avenue Chicago, Illinois 60629 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 312-838-3400 None Former name, former address and former fiscal year, if changed since last report. 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. Class Outstanding Common Stock, $.69 4/9 par value 15,095,659 Class B Common Stock, $.69 4/9 par value 7,247,005 2 PART I - FINANCIAL INFORMATION TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
ASSETS September 30 October 1 Dec. 31 CURRENT ASSETS 1995 1994 1994 Cash & Cash Equiv. $ 29,088,252 $ 30,247,142 $ 16,508,659 Marketable Securities 37,851,060 20,531,799 45,860,983 Accounts Receivable Less Allowances of $2,764,000,$2,738,000 & $1,466,000 64,271,180 61,280,500 22,086,591 Inventories at Cost (Last-in,First-out): Finished Goods & Work in Process 19,966,604 17,954,994 16,704,078 Raw Material & Supplies 11,169,913 11,051,436 12,464,240 Prepaid Expenses 2,133,925 4,180,915 3,094,273 Deferred Income Taxes 2,473,557 2,208,682 2,168,000 Total Current Assets 166,954,491 147,455,468 118,886,824 PROPERTY, PLANT & EQUIPMENT, (at Cost) Land 6,955,770 4,230,667 6,671,973 Building 27,281,178 25,347,199 26,981,822 Machinery & Equip. 111,665,781 112,179,487 109,438,484 Leasehold Impvts. 5,641 5,641 5,641 145,908,370 141,762,994 143,097,920 Less-Accumulated Deprec. and Amortization 63,120,497 56,522,400 57,449,897 82,787,873 85,240,594 85,648,023 OTHER ASSETS Intangibles 96,638,477 99,344,777 98,668,201 Miscellaneous Invest. 52,535 90,977 90,977 Misc. Other Assets 10,737,240 6,947,148 6,788,773 107,428,252 106,382,902 105,547,951 Total Assets $357,170,616 $339,078,964 $310,082,798 /TABLE 3
LIABILITIES AND SHAREHOLDERS' EQUITY September 30 October 1 Dec. 31 CURRENT LIABILITIES 1995 1994 1994 Bank Loans Short Term $ -- $ 20,436,148 $ -- E.T.I. Term Loan 20,000,000 -- -- Accounts Payable 8,603,221 8,657,842 6,124,104 Dividends Payable 1,423,604 1,218,934 1,219,291 Accrued Liabilities 24,452,689 20,277,399 17,045,884 Fed. & State Income Taxes 11,910,384 8,275,205 1,871,858 Total Current Liabilities 66,389,898 58,865,528 26,261,137 NON-CURRENT LIABILITIES E.T.I. Term Loan -- 20,000,000 20,000,000 Ind.Dev.Bonds Ser.1992 7,500,000 7,500,000 7,500,000 Post Retirement Benefits 5,279,061 4,882,464 4,992,719 Deferred Compensation 3,755,075 2,871,550 3,151,564 Deferred Fed.Inc.Taxes 7,366,000 6,195,761 7,716,256 Total Non-Current Liabilities 23,900,136 41,449,775 43,360,539 SHAREHOLDERS' EQUITY Common Stk., $.69-4/9 par value- 25,000,000 shares author. 15,095,659, 7,304,163 & 7,305,999 respectively, issued 10,482,957 5,072,200 5,073,475 Class B Common Stk $.69-4/9 par value- 10,000,000 shares author. 7,247,005, 3,543,546 & 3,541,710 respectively issued 5,032,576 2,460,730 2,459,455 Capital in Excess of Par Value 146,171,411 132,997,160 132,997,160 Retained Earnings 114,382,977 101,232,905 107,762,823 Cumulative Translation Adjustment (9,189,339) (2,999,334) (7,831,791) Total Shareholders' Equity 266,880,582 238,763,661 240,461,122 Total Liabilities and Shareholders' Equity $357,170,616 $339,078,964 $ 310,082,798 /TABLE 4 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (NOTE 1) (UNAUDITED)
13 Weeks Ended 39 Weeks Ended Sept. 30, 1995 & Oct. 1, 1994 Sept 30, 1995 & Oct. 1, 1994 1995 1994 1995 1994 NET SALES (Note 2) $116,471,443 $111,013,575 $245,514,864 $230,274,782 Cost of goods sold 63,954,938 59,818,297 130,376,227 119,652,734 Gross Margin 52,516,505 51,195,278 115,138,637 110,622,048 Operating Expenses: Marketing, Selling and Advertising 15,844,568 15,860,153 37,334,843 35,402,450 Distribution and Warehousing 7,508,843 6,539,884 17,723,266 15,623,004 General and Administrative 3,411,320 3,365,960 9,941,735 9,515,412 Goodwill amortization 676,575 676,575 2,029,725 2,029,725 27,441,306 26,442,572 67,029,569 62,570,591 Earnings from Operations 25,075,199 24,752,706 48,109,068 48,051,457 Other Income (Expense) Net 557,238 98,748 2,379,296 995,751 Earnings before Income Taxes 25,632,437 24,851,454 50,488,364 49,047,208 Provision for Income Taxes 9,400,000 9,465,000 18,611,000 18,839,000 Net Earnings (Note 5) 16,232,437 15,386,454 31,877,364 30,208,208 Retained Earnings at beginning of period 99,546,976 87,039,699 107,762,823 96,646,704 115,779,413 102,426,153 139,640,187 126,854,912 Deduct: Cash Dividends 1,396,436 1,193,248 3,986,119 3,387,205 Stock Dividends - 3% -- -- 21,271,091 22,234,802 1,396,436 1,193,248 25,257,210 25,622,007 Retained Earnings at end of period $114,382,977 $101,232,905 $114,382,977 $101,232,905 Net Earnings per Share (Note 3) $ .73 $ .69 $1.43 $1.35 Dividends Per Share * $ .0625 $ .055 $ .18 $ .1575 Average Number of Shares Outstanding (Notes 3 & 4) 22,342,664 22,342,664 22,342,664 22,342,664 *Does not include 3% Stock Dividend to Shareholders of Record on 3/10/95 and 3/11/94 and has been restated for the 2 for 1 Stock Split to Shareholders of Record 6/22/95. /TABLE 5 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
39 Weeks Ended September 30, 1995 & October 1, 1994 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net Earnings $31,877,364 $30,208,208 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 7,689,966 8,710,542 (Increase) decrease in assets: Accounts receivable (41,634,505) (40,624,494) Inventories (2,509,585) 287,721 Prepaid expenses and other assets (3,336,164) (4,587,550) Increase (decrease) in liabilities: Accounts payable and accrued liabilities 8,489,531 4,757,242 Income taxes payable and deferred 9,752,490 4,935,108 Postretirement health care and life insurance benefits 286,342 384,630 Other long term liabilities 603,511 498,096 Other -- (272,918) Net cash provided by operating activities 11,218,950 4,296,585 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (2,914,955) (5,094,014) Investment purchases (24,110,791) (36,478,612) Investment sales 32,282,432 70,958,208 Net cash provided by investing activities 5,256,686 29,385,582 CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings net of repayments under lines of credit agreements -- (2,164,525) Dividends paid in cash (3,896,043) (3,321,391) Other, net -- 65,082 Net cash used in financing activities (3,896,043) (5,420,834) Increase in cash and cash equivalents 12,579,593 28,261,333 Cash and cash equivalents-beginning of year 16,508,659 1,985,809 Cash and cash equivalents end of quarter $29,088,252 $30,247,142 Supplemental cash flow information: Income taxes paid $ 9,073,000 $12,029,000 Interest paid $ 1,171,000 $ 1,407,000
6 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (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. Note 2 - The Company's unshipped orders at September 30, 1995 amounted to $18,000,000. Note 3 - Based on Average Shares outstanding adjusted for Stock Dividends and the 2 for 1 Stock Split in 1995. Note 4 - Includes 3% Stock Dividends distributed on April 21, 1995 and April 22, 1994 and the 2 for 1 Stock Split effective on July 11, 1995. Note 5 - Results of operations for the period ended September 30, 1995 are not necessarily indicative of results to be expected for the year to end December 31, 1995 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 6 - Form 8-K was not required to be filed during the Third Quarter of 1995. Note 7 - Sales of unregistered Securities - None. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED STATEMENTS OF EARNINGS 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, 1995 Third Quarter vs. 1995 1994 Third Quarter, 1994 $116,471,443 $111,013,575 +4.9% Nine Months, 1995 Nine Months vs. 1995 1994 Nine Months, 1994 $245,514,864 $230,274,782 +6.6% Third Quarter 1995 net sales of $116,471,443, a record, were up 4.9% from Third Quarter 1994 net sales of $111,013,575. Nine Months of 1995 net sales of $245,514,864 were up 6.6% from Nine Months of 1994 net sales of $230,274,782. Third Quarter 1995 net sales of $116,471,443 were up 69.4% from Second Quarter 1995 net sales of $68,774,216 because historically the third quarter includes pre-Halloween sales and is our largest quarterly sales period of the year. Record sales for the Third Quarter and Nine Months of 1995 are principally attributable to volume increases. Sales rose primarily as a result of successful product line extensions and promotional programs, including pre- Halloween sales programs. Consolidated sales were adversely affected by the devaluation of the Mexican peso. Although sales in Mexico increased due to price increases and volume improvements, the translated U.S. dollar sales in Mexico were substantially lower in 1995 compared to 1994 as a result of exchange rate changes. COST OF SALES: Cost of Sales as a Third Quarter Percentage of Net Sales 1995 1994 3rd Qtr. 1995 3rd Qtr. 1994 $63,954,938 $59,818,297 54.9% 53.9% Cost of Sales as a Nine Months Percentage of Net Sales 1995 1994 9 Months 1995 9 Months 1994 $130,376,227 $119,652,734 53.1% 52.0% MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED STATEMENTS OF EARNINGS (Continued) Cost of sales as a percentage of net sales increased from 53.9% for the Third Quarter of 1994 to 54.9% in the Third Quarter of 1995. Nine Months cost of sales also increased from 52.0% in 1994 to 53.1% for the same period in 1995. This increase reflects increases in certain ingredients and packaging material costs as well as some changes in the sales mix of products. NET EARNINGS: Third Quarter, 1995 Third Quarter vs. 1995 1994 Third Quarter, 1994 $16,232,437 $15,386,454 +5.5% Nine Months, 1995 Nine Months vs. 1995 1994 Nine Months, 1994 $31,877,364 $30,208,208 +5.5% Third Quarter 1995 net earnings of $16,232,437 or $.73 per share, a record, were up 5.5% from net earnings of $15,386,454 or $.69 per share for the Third Quarter of 1994 Nine Months 1995 net earnings of $31,877,364 or $1.43 per share, also a new record, were up 5.5% from the prior year's Nine Months net earnings of $30,208,208 or $1.35 per share. Net earnings for the Third Quarter of 1995 of $16,232,437 increased $7,905,980 or 95.0% from Second Quarter of 1995 net earnings of $8,326,457. The increase in net earnings reflects higher sales and operating earnings, as well as increased net investment income. Increased net investment income results from an overall increase in cash equivalents and marketable securities, and reduced levels of debt outstanding. Earnings increased in spite of increased ingredient and packaging costs. In addition to the above, net earnings were aided by a slight reduction in the overall effective tax rate reflecting various federal, state and foreign tax benefits, including increased tax-exempt investment income. 8 PART II - OTHER INFORMATION TOOTSIE ROLL INDUSTRIES, INC AND SUBSIDIARIES - NONE - 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: November 3,1995 BY: Melvin J. Gordon Chairman of the Board BY: G. Howard Ember Vice President - Finance EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 3RD QTR 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AND CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 Dec-31-1995 Jan-01-1995 Sep-30-1995 9-MOS 29,088 37,851 64,271 2,764 31,137 166,954 145,908 63,120 357,171 66,390 7,500 0 0 15,516 251,365 357,171 245,515 245,515 130,376 67,030 (3,550) 280 1,171 50,488 18,611 31,877 0 0 0 31,877 1.43 1.43
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