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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 JUNE 28, 2003
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 (June
28, 2003)
Class Outstanding (In Thousands)
Common Stock, $.69 4/9 par value 34,572
Class B Common Stock, $.69 4/9 par value 17,233
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
JUNE 28, 2003
INDEX
Page No.
Part I - Financial Information
Item 1. Financial Statements: (unaudited)
Consolidated Statements of Financial Position 2
Consolidated Statements of Earnings, Comprehensive
Earnings and Retained Earnings 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-6B
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 and Use of Proceeds 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 7
Exhibits 31.1 and 31.2 7A-B
Exhibit 32 7C
ITEM 1. FINANCIAL INFORMATION
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of dollars) (UNAUDITED)
ASSETS June 28, June 29, Dec. 31,
CURRENT ASSETS 2003 2002 2002____
Cash & cash equivalents $ 54,354 $ 71,111 $105,507
Investments 58,876 62,682 40,737
Trade accounts receivable,
Less allowances of 2,070, $2,012 &
$2,005, respectively 20,591 22,306 22,686
Other receivables 3,104 3,898 4,073
Inventories, at cost
Finished goods & work in process 53,091 54,835 26,591
Raw material & supplies 20,924 21,460 17,054
Prepaid expenses 9,196 8,061 3,819
Deferred income taxes 4,481 1,772 4,481
Total current assets 224,617 246,125 224,948
PROPERTY, PLANT & EQUIPMENT,
(at cost)
Land 8,299 8,335 8,297
Buildings 43,953 43,553 43,948
Machinery & equipment 202,812 192,323 196,706
255,064 244,211 248,951
Less-accumulated depreciation 125,814 114,738 120,082
Net property, plant and equipment 129,250 129,473 128,869
OTHER ASSETS
Goodwill 38,151 38,151 38,151
Trademarks 79,348 79,348 79,348
Investments 128,177 88,588 116,501
Split dollar officer life insurance and
Other assets 58,260 55,028 58,263
303,936 261,115 292,263
Total assets $657,803 $636,713 $646,080
-2-
(The accompanying notes are an integral part of these statements)
(in thousands except per share data) (UNAUDITED)
LIABILITIES AND SHAREHOLDERS' EQUITY June 28, June 29, Dec. 31,
CURRENT LIABILITIES 2003 2002 2002____
Accounts payable $ 13,122 $ 13,228 $ 12,505
Dividends payable 3,627 3,617 3,579
Accrued liabilities 37,804 34,014 35,825
Income taxes payable 22,329 19,843 11,187
Total current liabilities 76,882 70,702 63,096
NON-CURRENT LIABILITIES
Industrial development bonds 7,500 7,500 7,500
Postretirement health care and life
Insurance benefits 8,512 7,794 8,151
Deferred compensation and other liabilities 23,222 20,612 20,939
Deferred income taxes 19,775 16,742 19,654
Total non-current liabilites 59,009 52,648 56,244
Total liabilities 135,891 123,350 119,340
SHAREHOLDERS' EQUITY
Common stock, $.69-4/9 par value-
120,000, shares authorized 34,572, 34,871 & 34,248
respectively, issued 24,008 24,216 23,783
Class B common stock, $.69-4/9 par value-
40,000, shares authorized 17,233, 16,784 & 16,759,
respectively, issued 11,967 11,655 11,638
Capital in excess of par value 376,405 375,700 355,658
Retained earnings 122,191 114,588 148,705
Accumulated other comprehensive earnings (loss) (10,667) (10,804) (11,052)
Treasury stock (at cost)-
56, 56 & 56, shares respectively (1,992) (1,992) (1,992)
Total shareholders' equity 521,912 513,363 526,740
Total liabilities and
Shareholders' equity $657,803 $636,713 $646,080
-2A-
The accompanying notes are an integral part of these statements.
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS (NOTE 1)
(in thousands except per share amounts) (UNAUDITED)
13 Weeks Ended
June 28, 2003 & June 29,2002
Net sales (note 2) $ 77,725 $ 77,131
Cost of goods sold 41,498 41,376
Gross margin 36,227 35,755
Selling, marketing and administrative expense 18,367 18,049
Earnings from operations 17,860 17,706
Other income, net 746 1,098
Earnings before income taxes 18,606 18,804
Provision for income taxes 6,289 6,488
Net earnings 12,317 12,316
Other comprehensive income, before tax:
Foreign currency translation adjustments 501 (1,101)
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period $ 305 $(255)
Less: amounts realized in earnings 25 330 1 (254)
Unrealized gains (losses) on derivatives:
Unrealized holding gains (losses) arising during period (833) 606
Less: amounts realized in earnings 347 (486) 408 1,014
Other comprehensive income (loss), before tax 345 (341)
Income tax benefit (expense) related to items of other
comprehensive income 58 (280)
Other comprehensive income (loss), net of tax 403 (621)
Comprehensive earnings $ 12,720 $ 11,695
Retained earnings at beginning of period $113,498 $105,885
Net earnings 12,317 12,316
Cash dividends (3,624) (3,613)
Retained earnings at end of period $122,191 $114,588
Net earnings per share (note 3) $.24 $.23
Dividends per share * $.07 $.07
Average number of shares outstanding 51,891 53,129
*Does not include 3% stock dividend to shareholders of record on 3/04/03 and 3/05/02.
-3-
(These accompanying notes are an integral part of the statements)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS (NOTE 1)
(in thousands except per share amounts) (UNAUDITED)
26 Weeks Ended
June 28, 2003 & June 29,2002
Net sales (note 2) $153,295 $156,122
Cost of goods sold 84,125 84,536
Gross margin 69,170 71,586
Selling, marketing and administrative expense 35,895 35,545
Earnings from operations 33,275 36,041
Other income, net 1,811 2,261
Earnings before income taxes 35,086 38,302
Provision for income taxes 11,860 13,214
Net earnings 23,226 25,088
Other comprehensive income, before tax:
Foreign currency translation adjustments 179 (809)
Unrealized gains on securities:
Unrealized holding gains (losses) arising during period $ 238 $(388)
Less: amounts realized in earnings 37 275 50 (338)
Unrealized gains on derivatives:
Unrealized holding gains (losses) arising during period (385) (404)
Less: amounts realized in earnings 437 52 613 209
Other comprehensive income (loss), before tax 506 (938)
Income tax expense (benefit) related to items of other
comprehensive income (121) 47
Other comprehensive income (loss), net of tax 385 (891)
Comprehensive earnings $ 23,611 $ 24,197
Retained earnings at beginning of period $148,705 $161,345
Net earnings 23,226 25,088
Cash dividends (7,169) (7,121)
Stock dividends - 3% (42,571) (64,724)
Retained earnings at end of period $122,191 $114,588
Net earnings per share (note 3) $.45 $.47
Dividends per share * $.14 $.14
Average number of shares outstanding 52,070 53,212
*Does not include 3% stock dividend to shareholders of record on 3/04/03 and 3/05/02.
-3A-
(These accompanying notes are an integral part of the statements)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
26 WEEKS ENDED
June 29, 2003 & June 29, 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 23,226 $ 25,088
Adjustments to reconcile net earnings to
Net cash provided by operating
activities:
Depreciation and amortization 5,791 5,818
Amortization/accretion of marketable securities 1,223 590
Purchase of trading securities (2,126) (1,759)
(Increase) decrease in assets:
Accounts receivable 2,119 (2,008)
Other receivables 1,000 (436)
Inventories (30,324) (35,382)
Prepaid expenses and other assets (5,372) (7,484)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 2,570 3,790
Income taxes payable and deferred 11,272 8,991
Postretirement health care and life
insurance benefits 361 344
Deferred compensation and other liabilities 494 697
Other 7 (33)
Net cash provided by (used in) operating activities 10,241 (1,784)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (6,065) (3,157)
Purchase of held to maturity securities (35,941) (22,286)
Maturity of held to maturity securities 10,066 16,074
Purchase of available for sale securities (17,746) (16,733)
Sale and maturity of available for
sales securities 16,682 11,679
Net cash used in investing activities (33,004) (14,423)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares repurchased and retired (21,212) (11,822)
Dividends paid in cash (7,178) (7,392)
Net cash used in financing activities (28,390) (19,214)
Decrease in cash and cash equivalents (51 153) (35,421)
Cash and cash equivalents-beginning of year 105,507 106,532
Cash and cash equivalents end of quarter $ 54,354 $ 71,111
Supplemental cash flow information:
Income taxes paid $ 2,756 $ 4,164
Interest paid $ 117 $ 216
(These accompanying notes are an integral part of the statements)
-4-
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 28, 2003
(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 2002
Annual Report on Form 10-K.
Note 2 - Average shares outstanding for the period ended June
28, 2003 reflects stock repurchases of 721 shares for
$21,212 and a 3% stock dividend distributed on April
16, 2003. Average shares outstanding for the period
ended June 29, 2002 reflects stock repurchases of 300
for $11,822 and a 3% stock dividend distributed on
April 17, 2002.
Note 3 - Results of operations for the period ended June 28,
2003 are not necessarily indicative of results to be
expected for the year to end December 31, 2003 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 - New Accounting and Reporting Pronouncements:
In June 2002, the FASB issued Statement of Financial
Accounting Standards No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" (SFAS No.
146). The provisions of SFAS No. 146 are effective for
exit or disposal activities that are initiated after
December 31, 2002. In November 2002, the FASB issued
Interpretation No. 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." This
Interpretation elaborates on the disclosures to be made
by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees
that it has issued. In April 2003, the FASB issued
Statement No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities" (SFAS
No. 149). SFAS No. 149 amends and clarifies financial
accounting and reporting related to derivative instruments,
including certain derivative instruments embedded in other
contracts. In November 2002, the EITF published Issue No.
-5-
00-21, "Revenue Arrangements with Multiple Deliverables"
("EITF 00-21"), which addresses certain aspects of the
accounting by a vendor for arrangements under which it will
perform multiple revenue-generating activities. In January
2003, the FASB issued FASB Interpretation No. 46, Consoli-
dation of Variable Interest Entities, an interpretation of
ARB 51" ("FIN 46"). FIN 46 requires that the assets,
liabilities and results of the activity of variable interest
entities be consolidated into the financial statements of the
company that has the controlling financial interest. The
Company believes that the above-discussed pronouncements are
generally not applicable to the Company's operations and to
the extent that they may be applicable they are not expected
to have a significant impact on 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, 2003
Second Quarter vs.
2003 2002 Second Quarter, 2002
$77,725 $77,131 +0.8%
First Half, 2003
First Half vs.
2003 2002 First Half, 2002
$153,295 $156,122 -1.8%
Second quarter sales were $77,725 compared to $77,131 in the second quarter
2002, an increase of $594 or 1%. First half sales were $153,295 compared to
$156,122 in the prior year first half, a decrease of $2,827 or 2%. Although
the timing of Easter shipments in 2003 contributed to improved sales results
for the second quarter 2003, the sluggish economy, a difficult retail environ-
ment, lower sales in Mexico and Canada, and higher sales in the fourth quarter
of 2002 as a result of January 2003 price increases contributed to the sales
decline in the first half 2003. Selective price increases did however aid sales
results in the second quarter and first half of 2003.
COST OF SALES:
Cost of Sales as a
Second Quarter Percentage of Net Sales
2003 2002 2nd Qtr. 2003 2nd Qtr. 2002
$41,498 $41,376 53.4% 53.6%
Cost of Sales as a
First Half Percentage of Net Sales
2003 2002 1st Half 2003 1st Half 2002
$84,125 $84,536 54.9% 54.1%
Cost of sales as a percentage of net sales decreased from 53.6% for second
quarter 2002 to 53.4% for second quarter 2003. This improvement reflects
selective price increases, higher total sales and effective cost control
programs, however, higher ingredient costs mitigated much of these benefits.
First half cost of sales as a percentage of net sales increased from 54.1% in
2002 to 54.9% in 2003. This adverse increase in costs reflects higher
ingredient costs and lower sales volume as discussed above.
-6-
The Company has experienced higher ingredient costs for almost all of its
principal ingredients, including sugar, corn syrup, vegetable oil, cocoa and
chocolate. Although selling price increases were initiated for many of the
Company's products in January 2003, additional selling price increases and bag
weight declines (indirect selling price increases) on certain items were
phased-in throughout the first half 2003 in order to further mitigate these
higher costs.
NET EARNINGS:
Second Quarter, 2003
Second Quarter vs.
2003 2002 Second Quarter, 2002
$12,317 $12,316 +0.01%
First Half, 2003
First Half vs.
2003 2002 First Half, 2002
$23,226 $25,088 -7.4%
Second quarter, earnings from operations were $17,860 and $17,706 in 2003 and
2002, respectively, an increase of $154 or 1%. First half earnings from
operations were $33,275 and $36,041 in 2003 and 2002, respectively, a decrease
of $2,766 or 8%. Improved second quarter 2003 earnings from operations are the
result of increased sales, price increases and cost controls as discussed above.
The decrease in first half 2003 operating earnings is attributed to lower sales
volumes and higher ingredient costs as discussed above. In addition, first half
2003 results reflect a $500 pre-tax provision relating to a customer bankruptcy.
Second quarter 2003 net earnings were $12,317 compared to second quarter 2002
net earnings of $12,316. Second quarter 2003 earnings per share were $0.24,
compared to $.23 per share in the prior year comparative period, an increase of
$.01 or 4.3%. First half 2003 net earnings were $23,226 compared to the prior
year first half 2002 net earnings of $25,088. First half 2003 earnings per
share were $.45 compared to $.47 in first half 2002, a decrease of $.02 or 4.3%.
Net earnings per share in the second quarter and first half 2003 were aided by
Share repurchases which resulted in a slight reduction in average shares out-
standing. Lower investment income resulting from lower interest rates adversely
affected second quarter and first half 2003 net earnings as compared to corre-
sponding reporting periods in 2002.
The consolidated effective income tax rate favorably decreased from 34.5% in the
first half of 2002 to 33.8% in the first half of 2003. This improvement
generally reflects a reduction in state income taxes.
-6A-
LIQUIDITY AND CAPITAL RESOURCES:
The Company's current ratio (current assets divided by current liabilities) is
2.9 to 1 as of the end of the second quarter 2003 as compared to 3.5 to 1 as of
the second quarter 2002 and 3.6 to 1 as of the fourth quarter 2002. Net working
capital was $147,735 as of the end of the second quarter 2003 as compared to
$175,423 and $161,852 as of the end of the second quarter 2002 and fourth
quarter 2002, respectively. These decreases in working capital are principally
due to changes in long-term investments, which were $128,177 as of the second
quarter 2003 compared to $116,501 and $88,588 as of the end of the fourth
quarter 2002 and second quarter 2002, respectively. Net cash provided by
operating activities was $10,241 for the first half 2003 compared to $1,784 of
cash used by operating activities for the prior year first half 2002. This
change primarily reflects changes in accounts receivable, inventories, and
income taxes payable and deferred. Capital expenditures for 2003 are antic-
ipated 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.
Investments in debt securities that matured during the first half 2003 and 2002
were generally replaced with debt securities with maturities greater than one
year.
The Company repurchased and retired $21,212 and $11,822 of its shares outstand-
ing during the first half 2003 and 2002, respectively.
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 prefer-
ences, 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.
-6B-
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, 2002.
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 within 90 days of the filing date of this quarterly
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 significant 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 and Use of Proceeds
Sales of unregistered Securities - None.
Item 4. Submission of Matters to a Vote of Security-Holders
At the Annual Meeting of Shareholders of the Company, held on May 5, 2003, 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 191,482,356 4,175,577 -0- -0-
Ellen R. Gordon 191,488,895 4,169,038 -0- -0-
Lana Jane Lewis-Brent 193,512,160 2,145,773 -0- -0-
Charles W. Siebert 193,494,941 2,162,992 -0- -0-
Richard P. Bergeman 193,520,786 2,137,147 -0- -0-
2. Proposal to ratify the appointment of PricewaterhouseCoopers LLP as auditors
for the fiscal year 2003:
Broker
For Withheld Abstain Non-Vote
Common Shares and Class B
Common Shares voting together 192,892,260 2,627,807 137,866 -0-
No other matters were submitted to a vote by ballot at the 2003 Annual Meeting.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 31.1 and 31.2 - Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Exhibit 32 - Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Form 8-K was furnished on April 16, 2003 containing a press release
announcing first quarter 2003 earnings.
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. 07, 2003 BY:/s/ Melvin J. Gordon_____
Melvin J. Gordon
Chairman of the Board
BY:_/s/ G. Howard Ember, Jr.
G. Howard Ember, Jr.
Vice President - Finance
-7-
Exhibit 31.1
Section 302 Certification
1. I, Melvin J. Gordon, Chairman and Chief Executive Officer of Tootsie
Roll Industries, Inc., certify that I have reviewed this Form 10-Q of
Tootsie Roll Industries, Inc.
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures 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 quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Dated: Aug. 07, 2003 _/s/ Melvin J. Gordon_____
Melvin J. Gordon
Chairman and Chief
Executive officer
-7A-
Exhibit 31.2
Section 302 Certification
1. I, G Howard Ember, Vice President/Finance and Chief Financial
Officer of Tootsie Roll Industries, Inc., certify that I have reviewed
this Form 10-Q of Tootsie Roll Industries, Inc.
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures 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 quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Dated: Aug. 07, 2003 _/s/ G. Howard Ember, Jr._
G. Howard Ember, Jr.
Vice President/Finance and
Chief Financial Officer
-7B-
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 June 28, 2003 (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. 07, 2003 _/s/ Melvin J Gordon___
MELVIN J GORDON
Chairman and Chief and
Executive Officer
Dated: Aug. 07, 2003 _/s/ G. Howard Ember, Jr.
G. Howard Ember, Jr.
V.P./Finance and
Chief Financial Officer
-7C-