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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 JULY 3, 2004
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 (July
3, 2004)
Class Outstanding
Common Stock, $.69 4/9 par value 34,660,933
Class B Common Stock, $.69 4/9 par value 17,614,016
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
JULY 3, 2004
INDEX
Page No.
Part I - Financial Information
Item 1. Financial Statements:
Condensed Consolidated Statements of
Financial Position 2
Condensed Consolidated Statements of Earnings,
Comprehensive Earnings and Retained Earnings 3
Condensed Consolidated Statements of Cash Flows 4
Notes to Condensed Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
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, Use of Proceeds and Issuer
Purchases of Equity Securities. 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 7A
Certifications 7B-D
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of dollars) (UNAUDITED)
ASSETS July 3, June 28, Dec. 31,
CURRENT ASSETS 2004 2003 2003____
Cash & cash equivalents $ 59,750 $ 54,354 $ 84,084
Investments 62,130 58,876 86,961
Trade accounts receivable,
Less allowances of $2,020, $2,070 & $1,970 21,837 20,591 18,131
Other receivables 3,014 3,104 3,076
Inventories, at cost
Finished goods & work in process 55,821 53,089 28,969
Raw material & supplies 21,737 20,926 17,117
Prepaid expenses 11,204 9,196 4,416
Deferred income taxes 951 4,481 951
Total current assets 236,444 224,617 243,705
PROPERTY, PLANT & EQUIPMENT,
(at cost)
Land 8,254 8,299 8,265
Buildings 44,925 43,953 44,960
Machinery & equipment 213,781 202,812 206,697
266,960 255,064 259,922
Less-accumulated depreciation 136,280 125,814 130,759
Net property, plant and equipment 130,680 129,250 129,163
OTHER ASSETS
Goodwill 38,151 38,151 38,151
Trademarks 79,348 79,348 79,348
Investments 126,135 128,177 112,431
Split dollar officer life insurance 66,043 58,260 62,499
309,677 303,936 292,429
Total assets $676,801 $657,803 $665,297
-2-
(The accompanying notes are an integral part of these statements)
(in thousands except per share data) (UNAUDITED)
LIABILITIES AND SHAREHOLDERS' EQUITY July 3, June 28, Dec. 31,
CURRENT LIABILITIES 2004 2003 2003____
Accounts payable $ 11,752 $ 13,122 $ 11,947
Dividends payable 3,666 3,627 3,589
Accrued liabilities 39,076 37,804 38,834
Income taxes payable 18,941 22,329 8,517
Total current liabilities 73,435 76,882 62,887
NON-CURRENT LIABILITIES
Industrial development bonds 7,500 7,500 7,500
Postretirement health care and life
insurance benefits 9,671 8,512 9,302
Deferred compensation and other liabilities 27,385 23,222 26,396
Deferred income taxes 22,896 19,775 22,631
Total non-current liabilities 67,452 59,009 65,829
Total liabilities 140,887 135,891 128,716
SHAREHOLDERS' EQUITY
Common stock, $.69-4/9 par value-
120,000 shares authorized; 34,661, 34,572 & 34,082
respectively, issued 24,070 24,008 23,668
Class B common stock, $.69-4/9 par value-
40,000 shares authorized; 17,614, 17,233 & 17,145
respectively, issued 12,232 11,967 11,906
Capital in excess of par value 397,745 376,405 357,922
Retained earnings 115,512 122,191 156,786
Accumulated other comprehensive earnings (loss) (11,653) (10,667) (11,709)
Treasury stock (at cost)-
58, 58 & 58 shares respectively (1,992) (1,992) (1,992)
Total shareholders' equity 535,914 521,912 536,581
Total liabilities and
Shareholders' equity $676,801 $657,803 $665,297
-2A-
The accompanying notes are an integral part of these statements.
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS
(in thousands except per share amounts) (UNAUDITED)
13 Weeks Ended
July 3, 2004 & June 28,2003
Net sales $ 77,157 $ 77,725
Cost of goods sold 42,165 42,184
Gross margin 34,992 35,541
Selling, marketing and administrative expense 18,173 18,367
Earnings from operations 16,819 17,174
Other income, net 1,021 1,432
Earnings before income taxes 17,840 18,606
Provision for income taxes 6,012 6,289
Net earnings 11,828 12,317
Other comprehensive income, before tax:
Foreign currency translation adjustments (472) 501
Unrealized (losses) gains on securities (211) 330
Unrealized gains (losses) on derivatives 776 (486)
Other comprehensive income before tax 93 345
Income tax (expense) benefit related to items of other
comprehensive income (209) 58
Other comprehensive (loss) income, net of tax (116) 403
Comprehensive earnings $ 11,712 $ 12,720
Retained earnings at beginning of period $107,345 $113,498
Net earnings 11,828 12,317
Cash dividends (3,661) (3,624)
Retained earnings at end of period $115,512 $122,191
Net earnings per share (note 2) $.23 $.23
Dividends per share * $.07 $.07
Average number of shares outstanding 52,397 53,413
*Does not include 3% stock dividend to shareholders of record on 3/02/04 and 3/04/03.
-3-
(The accompanying notes are an integral part of the statements)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS
(in thousands except per share amounts) (UNAUDITED)
26 Weeks Ended
July 3, 2004 & June 28,2003
Net sales $157,203 $153,295
Cost of goods sold 87,481 85,153
Gross margin 69,722 68,142
Selling, marketing and administrative expense 36,843 35,895
Earnings from operations 32,879 32,247
Other income, net 2,296 2,839
Earnings before income taxes 35,175 35,086
Provision for income taxes 11,854 11,860
Net earnings 23,321 23,226
Other comprehensive income, before tax:
Foreign currency translation adjustments (393) 179
Unrealized (losses) gains on securities (271) 275
Unrealized gains on derivatives 979 52
Other comprehensive income before tax 315 506
Income tax related to items of other
comprehensive income (260) (121)
Other comprehensive income, net of tax 55 385
Comprehensive earnings $ 23,376 $ 23,611
Retained earnings at beginning of period $156,786 $148,705
Net earnings 23,321 23,226
Cash dividends (7,236) (7,169)
Stock dividends - 3% (57,359) (42,571)
Retained earnings at end of period $115,512 $122,191
Net earnings per share (note 2) $.44 $.43
Dividends per share * $.14 $.14
Average number of shares outstanding 52,493 53,591
*Does not include 3% stock dividend to shareholders of record on 3/02/04 and 3/04/03.
-3A-
(The accompanying notes are an integral part of the statements)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
26 WEEKS ENDED
July 3, 2004 & June 28, 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 23,321 $ 23,226
Adjustments to reconcile net earnings to
Net cash provided by operating
activities:
Depreciation and amortization 5,615 5,791
Amortization of marketable securities 1,333 1,223
Purchase of trading securities (1,776) (2,126)
(Increase) decrease in assets:
Accounts receivable (3,768) 2,119
Other receivables 680 1,000
Inventories (31,592) (30,324)
Prepaid expenses and other assets (10,354) (5,372)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 107 2,570
Income taxes payable and deferred 10,682 11,272
Postretirement health care and life
insurance benefits 369 361
Deferred compensation and other liabilities 1,097 494
Other (86) 7
Net cash (used in) provided by operating activities (4,372) 10,241
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (7,282) (6,065)
Purchase of held to maturity securities (22,049) (35,941)
Maturity of held to maturity securities 32,146 10,066
Purchase of available for sale securities (37,528) (17,746)
Sale and maturity of available for
sales securities 38,718 16,682
Net cash provided by (used in) investing activities 4,005 (33,004)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid in cash (7,560) (7,178)
Shares repurchased and retired (16,407) (21,212)
Net cash used in financing activities (23,967) (28,390)
Decrease in cash and cash equivalents (24,334) (51,153)
Cash and cash equivalents-beginning of year 84,084 105,507
Cash and cash equivalents end of quarter $ 59,750 $ 54,354
Supplemental cash flow information:
Income taxes paid $ 1,688 $ 2,756
Interest paid $ 95 $ 117
Stock dividend issued $ 56,959 $ 42,513
(The accompanying notes are an integral part of the statements)
-4-
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JULY 3, 2004
(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 2003
Annual Report on Form 10-K.
Note 2 - Average shares outstanding for the period from January 1,
2004 to July 3, 2004 reflects stock repurchases of 474
shares for $16,407 and a 3% stock dividend distributed
on April 14, 2004. Average shares outstanding for the
period from January 1, 2003 to June 28, 2003 reflects
stock repurchases of 721 shares for $21,212 and a 3%
stock dividend distributed on April 16, 2003.
Note 3 - Results of operations for the 13 and 26 week periods ended
July 3, 2004 are not necessarily indicative of results to
be expected for the year to end December 31, 2004 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 - The Company's quarterly financial reporting is based on 13
week periods ending on the last Saturday of each period while
its annual reporting is based on the twelve months ending
December 31st of the calendar year. This quarterly reporting
requires that the Company periodically reset its quarter-end
dates to maintain 13-week quarterly reporting periods during
its calendar year. As a result, the second quarter 2004 and
2003 periods ended on July 3, 2004 and June 28, 2003,
respectively. If first half 2004 had ended on June 28, 2004
instead of July 3, 2004, the Company estimates that first
half 2004 net sales would have been approximately $2,400 less
than the reported 2004 sales amount.
-5-
Note 5 - In January 2004, the FASB issued Staff Position No. 106-1,
"Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug,, Improvement and Modernization
Act of 2003" (FSP 106-1). The Company has elected to defer
Accounting for the effects of the Act, as permitted by FSP
106-1. Accordingly, the Company's accumulated postretirement
benefit obligation and net postretirement health care costs
included in the consolidated financial statements and
accompanying notes do not reflect the effects of the Act.
The Company does not anticipate the effect of the Act to be
significant to the financial statements.
The Company is not aware of any other new accounting and
reporting pronouncements issued by the FASB or other
regulatory bodies that are significant to 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, 2004
Second Quarter vs.
2004 2003 Second Quarter, 2003
$77,157 $77,725 (0.7)%
First Half, 2004
First Half vs.
2004 2003 First Half, 2003
$157,203 $153,295 2.5%
Second quarter 2004 net sales were $77,157 compared to $77,725 in second
quarter 2003, a decrease of $568 or 0.7%. First half 2004 net sales were
$157,203 compared to $153,295 in the prior year first half 2003, an increase
of $3,908 or 2.5%. The Company's quarterly financial reporting is based on
13 week periods ending on the last Saturday of each period while its annual
reporting is based on the twelve months ending December 31st of the calendar
year. This quarterly reporting requires that the Company periodically reset
its quarter-end dates to maintain 13-week quarterly reporting periods during
its calendar year. As a result, the Company's first half 2004 and 2003
reporting periods ended on July 3, 2004 and June 28, 2003, respectively. If
first half 2004 had ended on June 28, 2004, the Company estimates that first
half 2004 net sales would have been approximately $2,400 less than the above
reported 2004 sales amount. Because the second quarter of 2004 and 2003
both comprised exactly 13 weeks, the aforementioned did not affect second
quarter 2004 and 2003 comparative reported sales.
Second quarter 2004 sales were adversely affected by the timing of certain
customer shipments, which resulted in approximately $2,200 of comparable
customer sales in second quarter 2003 being delivered and recorded as sales
in third quarter 2004.
COST OF SALES:
Cost of Sales as a
Second Quarter Percentage of Net Sales
2004 2003 2nd Qtr. 2004 2nd Qtr. 2003
$42,165 $42,184 54.6% 54.3%
Cost of Sales as a
First Half Percentage of Net Sales
2004 2003 1st Half 2004 1st Half 2003
$87,481 $85,153 55.6% 55.5%
-6-
Cost of sales as a percentage of net sales increased slightly from 54.3% for
second quarter 2003 to 54.6% for second quarter 2004, an increase of 0.3% as
a percentage of sales. First half cost of sales as a percentage of net
sales also increased slightly from 55.5% in 2003 to 55.6% in 2004, an
increase of 0.1% as a percentage of sales. With the exception of vegetable
oil, the Company has generally experienced lower ingredient costs for most
of its principal ingredients, including sugar, corn syrup, cocoa and
chocolate. However, such cost reductions were generally offset by higher
manufacturing labor and plant overhead costs.
NET EARNINGS:
Second Quarter, 2004
Second Quarter vs.
2004 2003 Second Quarter, 2003
$11,828 $12,317 (4.0)%
First Half, 2004
First Half vs.
2004 2003 First Half, 2003
$23,321 $23,226 0.4%
Second quarter earnings from operations were $16,819 and $17,174 in 2004 and
2003, respectively, a decrease of $355 or 2.1%. First half earnings from
operations were $32,879 and $32,247 in 2004 and 2003, respectively, an
increase of $632 or 2.0%. Selling, marketing and administrative expenses
decreased from $18,367 in second quarter 2003 to $18,173 in second quarter
2004, a decrease of $194 or 1.1%. However, first half selling, marketing and
administrative expenses increased from $35,895 in 2003 to $36,843 in 2004,
an increase of $948 or 2.6%. The aforementioned increase in expenses
principally reflects the 2.5% sales increase for first half 2004. Selling,
marketing and administrative expenses as a percentage of net sales were
23.6% in both second quarter 2004 and 2003, and 23.4% in both first half
2004 and 2003, respectively. Earnings from operations for the second quarter
and first half periods generally followed the sales, gross profit and
operating expense trends for the respective comparative periods as discussed
above.
Second quarter 2004 net earnings were $11,828 compared to second quarter
2003 net earnings of $12,317, a decrease of 4.0%. Second quarter earnings
per share were $0.23 in both 2004 and 2003 second quarter periods. First
half 2004 net earnings were $23,321 compared to prior year first half 2003
net earnings of $23,226, an increase of 0.4%. First half 2004 earnings per
share were $.44 compared to $.43 in first half 2003, an increase of $.01 or
2%. Lower other income, principally comprising investment income, in the
second quarter and first half 2004 periods also impacted net earning for the
respective periods. In addition to the factors discussed above, net earnings
per share in the second quarter and first half 2004 were aided by share
repurchases in the open market which resulted in a slight reduction in
average shares outstanding.
-6A-
The consolidated effective income tax rate was 33.7% in both the second
quarter and first half 2004 compared to 33.8% in both the second quarter and
first half 2003. This improvement generally reflects a reduction in state
income taxes.
LIQUIDITY AND CAPITAL RESOURCES:
The Company's current ratio (current assets divided by current liabilities)
is 3.2 to 1 as of the end of the second quarter 2004 as compared to 2.9 to 1
as of the second quarter 2003 and 3.9 to 1 as of the fourth quarter 2003.
Net working capital was $163,009 as of the end of the second quarter 2004 as
compared to $147,735 and $180,818 as of the end of the second quarter 2003
and fourth quarter 2003, respectively. Such net working capital amounts are
principally reflected in aggregate cash and cash equivalents and short-term
investments which were $121,880 as of the end of second quarter 2004
compared to $113,230 and $171,045 as of the end of second quarter 2003 and
fourth quarter 2003, respectively. In addition, long-term investments,
principally debt securities comprising municipal bonds, were $126,135 as of
the end of second quarter 2004 as compared to $128,177 and $112,431 as of
the end of second quarter 2003 and fourth quarter 2003, respectively.
Investments in municipal bonds and other debt securities that matured during
first half 2004 and 2003 were generally replaced with debt securities of
similar maturities.
Net cash used in operating activities was $4,372 in first half 2004 compared
to $10,241 of net cash provided by operations in first half 2003. The net
cash used in first half 2004 operating activities reflects the Company's
historical build-up of inventories and the pre-funding of the annual cost of
certain defined contribution employee benefit plans, as well as the payments
of split dollar insurance premiums. The timing of sales and collections and
their effects on changes in beginning and ending accounts receivable
balances also contributed to additional cash used in operations in first
half 2004 compared to first half 2003.
Capital expenditures for the first half 2004 and 2003 were $7,282 and
$6,065, respectively. Capital expenditures for the 2004 year are
anticipated 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.
Cash dividends paid in first half 2004 and 2003 were $7,560 and $7,178,
respectively. The Company repurchased and retired $16,407 and $21,212 of
its shares outstanding during first half 2004 and 2003, respectively.
-6B-
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 preferences, 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.
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, 2003.
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 as of the end of the period covered by this 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 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, Use of Proceeds and Issuer Purchases of
Equity Securities.
(a) Total (b) Average Shares Approximate Dollar Value) of
Number of Price Paid per Purchased as Part of Shares that May Yet
Shares Share Publicly Announced Plans Be Purchased Under the Plans
Period Purchased Or Programs Or Programs
APR 4 TO MAY 1 17,600 $ 35.22 NOT APPLICABLE NOT APPLICABLE
MAY 2 TO MAY 29 157,700 33.80 NOT APPLICABLE NOT APPLICABLE
MAY 30 TO JUL 3 128,550 33.15 NOT APPLICABLE NOT APPLICABLE
TOTAL 303,850 $ 33.61
While the Company does not have a formal or publicly announced stock
repurchase program, the company's board of directors periodically authorizes
a dollar amount for share repurchases. The treasurer executes share repurchase
transactions according to these guidelines.
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders of the Company, held on May 3, 2004, 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 194,703,733 4,967,963 -0- -0-
Ellen R. Gordon 194,714,995 4,956,701 -0- -0-
Lana Jane Lewis-Brent 199,167,345 504,351 -0- -0-
Charles W. Siebert 199,204,549 467,147 -0- -0-
Richard P. Bergeman 198,889,688 782,008 -0- -0-
2. Proposal to ratify the appointment of PricewaterhouseCoopers LLP as auditors
for the fiscal year 2004:
Broker
For Withheld Abstain Non-Vote
Common Shares and Class B
Common Shares voting together 199,001,943 582,593 87,160 -0-
No other matters were submitted to a vote by ballot at the 2004 Annual Meeting.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 31.1 and 31.2 - Certifications Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
(b) Exhibit 32 - Certification Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
(c) Form 8-K was furnished on April 27, 2004 and July 28, 2004
containing a press release announcing earnings for first and
second quarter 2004, respectively.
-7-
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. 06, 2004 BY: /S/MELVIN J. GORDON
Melvin J. Gordon
Chairman of the Board
Date: Aug. 06, 2004 BY: /S/HOWARD EMBER, JR.
G. Howard Ember, Jr.
Vice President - Finance
-7A-
Exhibit 31.1
CERTIFICATION
I, Melvin J. Gordon, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Tootsie Roll
Industries, Inc,;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the state-
ments made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial infor-
mation included in this 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 report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such dis-
closure controls and procedures to be designed under our supervision, 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 report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: Aug 06, 2004
By: /S/MELVIN J. GORDON
Melvin J. Gordon
Chairman and Chief Executive Officer
-7B-
Exhibit 31.2
CERTIFICATION
I, G. Howard Ember, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Tootsie Roll
Industries, Inc,;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the state-
ments made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial infor-
mation included in this 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 report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
d) Designed such disclosure controls and procedures, or caused such dis-
closure controls and procedures to be designed under our supervision, 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 report is being prepared;
e) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
f) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
c) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
d) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: Aug 06, 2004
By: /S/G. HOWARD EMBER, JR.
G. Howard Ember, Jr.
Vice President/Finance and
Chief Financial Officer
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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 July 3, 2004 (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 06, 2004 /S/MELVIN J GORDON
MELVIN J GORDON
Chairman and Chief and
Executive Officer
Dated: Aug 06, 2004 /S/G. HOWARD EMBER, JR.
G. Howard Ember, Jr.
V.P./Finance and
Chief Financial Officer
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