-----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, Ri8bLNlhh+WpjUd3uhrPHZ42e+QGWZx5D3LcMnP4SDuFV7oQLXkQ2FZVVa8tHzPh wXvd0YuTdG8maNoWaQPa8w== 0000098677-97-000002.txt : 19970506 0000098677-97-000002.hdr.sgml : 19970506 ACCESSION NUMBER: 0000098677-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970329 FILED AS OF DATE: 19970505 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: 97594980 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 03/29/97 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 March 29, 1997 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 16,018,418 Class B Common Stock, $.69 4/9 par value 7,596,383 2 PART I - FINANCIAL INFORMATION TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(UNAUDITED) ASSETS March 29 March 30 Dec. 31 CURRENT ASSETS 1997 1996 1996 Cash & Cash Equiv. $ 37,487,705 $ 30,835,259 $ 45,658,799 Marketable Securities 105,068,687 72,343,386 98,498,317 Accounts Receivable Less Allowances of $2,074,000,$1,962,000 & $1,885,000 19,026,063 23,195,231 21,207,346 Inventories at Cost (Last-in,First-out): Finished Goods & Work in Process 27,939,041 24,802,427 20,358,811 Raw Material & Supplies 12,348,294 14,750,274 9,950,294 Prepaid Expenses 4,205,972 4,638,565 3,000,580 Deferred Income Taxes 2,839,000 2,923,000 2,839,000 Total Current Assets 208,914,762 173,488,142 201,513,147 PROPERTY, PLANT & EQUIPMENT, (at Cost) Land 6,897,457 6,906,137 6,895,126 Building 28,643,304 28,270,993 29,303,643 Machinery & Equip. 118,949,136 117,799,121 117,130,552 154,489,897 152,976,251 153,329,321 Less-Accumulated Deprec. and Amortization 73,820,803 66,586,207 71,642,018 80,669,094 86,390,044 81,687,303 OTHER ASSETS Intangibles 92,579,027 95,285,327 93,255,603 Miscellaneous Investment 26,847 52,535 26,847 Misc. Other Assets 16,666,584 10,946,532 14,973,178 109,272,458 106,284,394 108,255,628 Total Assets $398,856,314 $366,162,580 $391,456,078
3
(UNAUDITED) LIABILITIES AND SHAREHOLDERS( EQUITY March 29 March 30 Dec. 31 CURRENT LIABILITIES 1997 1996 1996 Notes Payable to Banks $ -- $ 20,000,000 $ -- Accounts Payable 9,834,673 8,675,287 8,560,080 Dividends Payable 1,756,365 1,479,368 1,667,817 Accrued Liabilities 25,732,281 19,482,384 28,239,763 Fed. & State Income Taxes 12,869,580 10,918,211 9,716,422 Total Current Liabilities 50,192,899 60,555,250 48,184,082 NON-CURRENT LIABILITIES Ind.Dev.Bonds Ser.1992 7,500,000 7,500,000 7,500,000 Post Retirement Benefits 5,708,379 5,479,722 5,636,085 Deferred Compensation 8,405,886 4,435,990 7,986,782 Deferred Fed.Inc.Taxes 9,212,680 9,053,268 9,268,550 Total Non-Current Liabilities 30,826,945 26,468,980 30,391,417 SHAREHOLDERS( EQUITY Common Stk., $.69-4/9 par value- 25,000,000 shares author. 16,018,418,15,574,428 & 15,617,065 respectively, issued 11,123,762 10,815,436 10,845,044 Class B Common Stk $.69-4/9 par value- 10,000,000 shares author. 7,596,383, 7,429,625 & 7,386,988 respectively issued 5,275,200 5,159,395 5,129,787 Capital in Excess of Par Value 198,571,051 171,588,958 171,588,958 Retained Earnings 114,002,206 102,266,617 136,352,123 Cumulative Translation Adjustment (11,135,749) (10,692,056) (11,035,333) Total Shareholders( Equity 317,836,470 279,138,350 312,880,579 Total Liabilities and Shareholders( Equity $398,856,314 $366,162,580 $ 391,456,078
4 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (NOTE 1) (UNAUDITED) 13 Weeks Ended March 29, 1997 & March 30, 1996 1997 1996 NET SALES (Note 2) $ 66,257,600 $ 63,264,854 Cost of goods sold 32,934,937 32,578,259 Gross Margin 33,322,663 30,686,595 Operating Expenses: Marketing, Selling and Advertising 9,894,191 9,620,514 Distribution and Warehousing 5,160,233 4,831,342 General and Administrative 3,865,905 3,620,941 Goodwill amortization 676,575 676,575 19,596,904 18,749,372 Earnings from Operations 13,725,759 11,937,223 Other Income (Expense) Net 1,658,038 1,057,739 Earnings before Income Taxes 15,383,797 12,994,962 Provision for Income Taxes 5,633,000 4,877,000 Net Earnings (Note 5) 9,750,797 8,117,962 Retained Earnings at beginning of period 136,352,123 121,476,879 146,102,920 129,594,841 Deduct: Cash Dividends 1,662,380 1,368,038 Stock Dividends - 3% 30,438,334 25,960,186 32,100,714 27,328,224 Retained Earnings at end of period $114,002,206 $102,266,617 Net Earnings per Share (Note 3) $ .41 $ .34 Dividends Per Share * $ .0725 $ .0625 Average Number of Shares Outstanding (Notes 3 & 4) 23,633,551 23,689,801 *Does not include 3% Stock Dividend to Shareholders of Record on 3/11/97 and 3/11/96.
5 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net Earnings $ 9,750,797 $ 8,117,962 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 2,876,210 2,772,611 (Increase) decrease in assets: Accounts receivable 2,157,902 422,191 Inventories (10,030,144) (7,241,236) Prepaid expenses and other assets (2,942,073) (118,206) Increase (decrease) in liabilities: Accounts payable and accrued liabilities (1,225,562) 686,722 Income taxes payable and deferred 3,095,870 2,933,948 Postretirement health care and life insurance benefits 72,294 94,183 Other long term liabilities 419,104 (90,946) Other (31,030) 119,150 Net cash provided by operating activities 4,143,368 7,696,379 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (1,138,150) (6,571,427) Purchase of held to maturity securities (12,234,589) (21,625,851) Maturity of held to maturity securities 5,229,865 5,208,198 Purchase of available for sale securities (6,000,000) -- Sale and maturity of available for sale securities 6,434,354 -- Net cash used in investing activities ( 7,708,520) (22,989,080) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid in cash (1,667,817) (1,396,026) Shares repurchased and retired (2,938,125) -- Net cash used in financing activities (4,605,942) (1,396,026) Decrease in cash and cash equivalents (8,171,094) (16,688,727) Cash and cash equivalents-beginning of year 45,658,799 47,523,986 Cash and cash equivalents end of quarter $37,487,705 $30,835,259 Supplemental cash flow information: Income taxes paid $ 2,420,000 $ 301,000 Interest paid $ 202,000 $ 372,000
6 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 29, 1997 (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 March 29, 1997 amounted to $13,700,000. Note 3 - Based on Average Shares outstanding adjusted for Stock Dividends. Note 4 - Includes 3% Stock Dividends distributed on April 22, 1997 and April 23, 1996. Note 5 - Results of operations for the period ended March 29, 1997 are not necessarily indicative of results to be expected for the year to end December 31, 1997 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 First Quarter of 1997. Note 7 - Sales of unregistered Securities - None. 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: First Quarter, 1997 First Quarter vs. 1997 1996 First Quarter, 1996 $66,257,600 $63,264,854 +4.7% First Quarter 1997 net sales of $66,257,600, a record, were up 4.7% from First Quarter 1996 net sales of $63,264,854. Sales rose as a result of successful promotional programs, the introduction of new products and product line extensions into the distribution channels. The increase in net sales principally reflects increases in volume. First Quarter 1997 net sales of $66,257,600 were down from Fourth Quarter 1996 net sales of $76,475,083. This is not considered unusual as the First Quarter of the year is normally the company's lowest quarter in sales and is consistent with the historical trend. COST OF SALES: Cost of Sales as a First Quarter Percentage of Net Sales 1997 1996 1st Qtr. 1997 1st Qtr. 1996 $32,934,937 $32,578,259 49.7% 51.5% Cost of sales as a percentage of net sales decreased slightly from 51.5% for First Quarter 1996 to 49.7% for First Quarter 1997. This improvement reflects lower prices in certain ingredients and packaging material costs and the benefits of higher sales volumes against relatively fixed factory overhead costs. NET EARNINGS: First Quarter, 1997 First Quarter vs. 1997 1996 First Quarter, 1996 $9,750,797 $8,117,962 +20.1% First Quarter 1997 net earnings of $9,750,797 or $0.41 per share, a record, were up 20.1% from net earnings of $8,117,962 or $0.34 per share for the First Quarter 1996. The increase in net earnings reflects higher sales, improved gross profit margins and effective on-going cost control programs which resulted in higher income from operations. Increased investment income and decreased interest expense also contributed to the overall increase in first quarter 1997 net earnings. The consolidated effective income tax rate decreased from 37.5% in the first quarter of 1996 to 36.6% in the first quarter of 1997. This favorable decrease reflect increased tax-free investment income as well as certain other state and foreign tax benefits. First Quarter 1997 net earnings of $9,750,797 decreased $868,554 or 8.2% from Fourth Quarter of 1996 net earnings of $10,619,351, which reflects the lower level of sales in the First Quarter 1997 compared to the Fourth Quarter 1996. This is consistent with historical trends. 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: May 7, 1997 BY: Melvin J. Gordon Chairman of the Board BY: G. Howard Ember Vice President - Finance EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 1ST 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-31-1997 Jan-01-1997 Mar-29-1997 3-MOS 37,488 105,069 21,100 2,074 40,287 208,915 154,490 73,821 398,856 50,193 7,500 0 0 16,399 301,438 398,856 66,258 66,258 32,935 19,597 (1,658) 108 253 15,384 5,633 9,751 0 0 0 9,751 .41 .41
-----END PRIVACY-ENHANCED MESSAGE-----