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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 APRIL 2, 2005
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 (April
2, 2005)
Class Outstanding
Common Stock, $.69 4/9 par value 35,581,783
Class B Common Stock, $.69 4/9 par value 18,034,648
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
APRIL 2, 2005
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 5-5B
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 6D
Part II - Other Information
Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds 7
Item 6. Exhibits 7
Signatures 7
Certifications 7A-C
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 April 02, April 03, Dec. 31,
CURRENT ASSETS 2005 2004 2004
Cash & cash equivalents $ 31,065 $ 52,942 $ 56,989
Investments 40,192 89,348 32,369
Trade accounts receivable,
Less allowances of
$2,404, $2,009 & $2,440 26,794 20,837 28,456
Other receivables 8,445 4,223 9,001
Inventories, at cost
Finished goods & work in process 47,293 37,669 37,384
Raw material & supplies 23,925 19,138 21,393
Prepaid expenses 3,997 15,707 5,719
Deferred income taxes 1,370 951 1,382
Total current assets 183,081 240,815 192,693
PROPERTY, PLANT & EQUIPMENT, at cost
Land 14,976 8,268 14,973
Buildings 61,725 44,968 61,714
Machinery & equipment 249,029 209,929 244,367
325,730 263,165 321,054
Less-accumulated depreciation 145,877 133,532 142,304
Net property, plant and equipment 179,853 129,633 178,750
OTHER ASSETS
Goodwill 73,974 38,151 74,002
Trademarks 193,342 79,348 193,342
Investments 85,713 120,705 96,640
Split dollar life insurance 67,743 62,861 66,094
Investment in joint venture 10,511 - 10,232
431,283 301,065 440,310
Total assets $794,217 $671,513 $811,753
-2-
(The accompanying notes are an integral part of these statements.)
(in thousands except per share data) (UNAUDITED)
LIABILITIES AND SHAREHOLDERS' EQUITY April 2, April 3, Dec. 31,
CURRENT LIABILITIES 2005 2004 2004
Bank loan $ 9,667 $ - $ 6,333
Accounts payable 15,888 14,614 19,315
Dividends payable 329 400 3,659
Accrued liabilities 42,613 37,562 44,722
Income taxes payable 13,378 13,714 8,288
Total current liabilities 81,875 66,290 82,317
NON-CURRENT LIABILITIES
Bank loan 67,333 - 85,667
Deferred income taxes 25,689 22,680 25,995
Postretirement health care and life
insurance benefits 10,238 9,510 10,075
Industrial development bonds 7,500 7,500 7,500
Deferred compensation and other
liabilities 29,673 27,446 30,020
Total non-current liabilites 140,433 67,136 159,257
Total liabilities 222,308 133,426 241,574
SHAREHOLDERS' EQUITY
Common Stock, $.69-4/9 par value-
120,000 shares authorized; 35,582,
34,933 & 34,760 respectively, issued 24,710 24,259 24,139
Class B common stock, $.69-4/9
par value-40,000 shares authorized;
18,035, 17,645 & 17,515,
respectively, issued 12,524 12,254 12,163
Capital in excess of par value 436,734 407,759 397,745
Retained earnings 111,266 107,345 149,055
Accumulated other comprehensive
earnings (loss) (11,333) (11,538) (10,931)
Treasury stock (at cost)-
60, 60 & 60 shares, respectively (1,992) (1,992) (1,992)
Total shareholders' equity 571,909 538,087 570,179
Total liabilities and
shareholders' equity $794,217 $671,513 $811,753
-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)
FIRST QUARTER ENDED
April 02, 2005 & April 03,2004
Net sales $ 97,925 $ 80,046
Cost of goods sold 58,476 45,316
Gross margin 39,449 34,730
Selling, marketing and administrative expense 22,290 18,670
Earnings from operations 17,159 16,060
Other income, net 1,207 1,275
Earnings before income taxes 18,366 17,335
Provision for income taxes 5,860 5,842
Net earnings 12,506 11,493
Other comprehensive income, before tax:
Foreign currency translation adjustments 86 79
Unrealized losses on securities (621) (60)
Unrealized (losses) gains on derivatives (153) 203
Other comprehensive (loss) income, before tax (688) 222
Income tax benefit (expense) related to items
of other comprehensive income 286 (51)
Other comprehensive (loss) income, net of tax (402) 171
Comprehensive earnings $ 12,104 $ 11,664
Retained earnings at beginning of period $149,055 $156,786
Net earnings 12,506 11,493
Cash dividends (3,655) (3,575)
Stock dividends - 3% (46,640) (57,359)
Retained earnings at end of period $111,266 $107,345
Net earnings per share $.23 $.21
Dividends per share * $.07 $.07
Average number of shares outstanding 53,720 54,153
*Does not include 3% stock dividend to shareholders of record
on 3/11/05 and 3/02/04.
-3-
(The accompanying notes are an integral part of the statements.)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars) (UNAUDITED)
FIRST QUARTER ENDED
April 2, 2005 & April 3, 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 12,506 $ 11,493
Adjustments to reconcile net earnings to
net cash provided by (used in) operating
activities:
Depreciation and amortization 3,553 2,754
Amortization of marketable securities 514 662
Purchase of trading securities (1,170) (1,521)
Changes in operating assets and liabilities:
Accounts receivable 1,679 (2,686)
Other receivables 459 (1,019)
Inventories (12,423) (10,704)
Prepaid expenses and other assets (175) (11,649)
Accounts payable and accrued liabilities (5,548) 1,383
Income taxes payable and deferred 4,803 5,247
Postretirement health care and life
insurance benefits 163 208
Deferred compensation and other liabilities 411 347
Other 24 (64)
Net cash provided by (used in) operating activities 4,796 (5,549)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (4,626) (3,191)
Purchase of held to maturity securities - (8,155)
Maturity of held to maturity securities - 8,250
Purchase of available for sale securities (3,000) (33,079)
Sale and maturity of available for
sale securities 5,611 23,928
Net cash used in investing activities ( 2,015) (12,247)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of bank loan (15,000) -
Dividends paid in cash (7,315) (7,164)
Shares repurchased and retired (6,390) (6,182)
Net cash used in financing activities (28,705) (13,346)
Decrease in cash and cash equivalents (25,924) (31,142)
Cash and cash equivalents-beginning of year 56,989 84,084
Cash and cash equivalents end of quarter $ 31,065 $ 52,942
Supplemental cash flow information:
Income taxes paid $ 462 $ 639
Interest paid $ 580 $ 81
Stock dividend issued $ 46,311 $ 56,959
(The accompanying notes are an integral part of the statements.)
-4-
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 2, 2005
(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 2004
Annual Report on Form 10-K.
Note 2 - Average shares outstanding for the period ended April
2, 2005 reflects stock repurchases of 216 shares for
$6,390 and a 3% stock dividend distributed on April
14, 2005. Average shares outstanding for the period
ended April 3, 2004 reflects stock repurchases of
170 shares for $6,182 and a 3% stock dividend
distributed on April 14, 2004.
Note 3 - Results of operations for the period ended April 2,
2005 are not necessarily indicative of results to be
expected for the year to end December 31, 2005 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 - On October 22, 2004, the President signed the American Jobs
Creation Act of 2004 (the "Act"). The Act creates a temporary
incentive for U.S. corporations to repatriate accumulated
income earned abroad by providing an 85% dividends received
deduction for certain dividends from controlled foreign
corporations. The deduction is subject to a number of
limitations and as of today, uncertainty remains as to how to
interpret certain provisions of the Act. As such, the company
has not yet determined whether, and to what extent, it may
repatriate earnings that have not yet been remitted to the
U.S. and therefore makes no estimate as to the amount of
future remittances.
-5-
The Act also provides for a deduction for income from
qualified domestic production activities, which will be
phased in from 2005 through 2010. This provision also is
subject to a number of limitations which affect the effective
tax rate in 2005 and later. The accompanying financial
statements reflect the company's estimate of the effect of
the Act on its effective tax rate in 2005.
Note 5 - On August 30, 2004, the company purchased certain assets and
assumed certain liabilities from Concord Confections, Inc.
and its affiliates (collectively Concord) including its 50%
equity interest in a Spanish joint venture. Cash
consideration paid of $218,229 was funded by the liquidation
of $64,229 of marketable securities and a bank term loan of
$154,000. The adjusted purchase price of $212,587 reflects
an estimated recovery of $6,642 relating to a deficiency in
minimum working capital required under terms of the purchase
contract. Subsequent to the end of first quarter 2005, the
company finalized the estimated working capital deficiency
and collected $6,755. The results of Concord's operations
have been included in the company's condensed consolidated
financial statements since August 30, 2004. Concord holds a
strong market position in the bubble gum category and its
products are sold primarily under the Dubble Bubble brand
name and trademark.
The following table includes the unaudited pro forma net
sales, net earnings and net earnings per share for the
first quarter of 2004 as if the company had acquired
Concord as of January 1, 2004. Pro forma adjustments are
necessary to reflect costs and expenses of financing the
purchase, including additional interest expense on bank
borrowings, decrease in investment income reflecting the
sale of marketable securities, and changes in depreciation
expense resulting from fair value adjustments to net
tangible assets.
The pro forma results do not reflect any cost savings or
synergies that might be realized, including the anticipated
elimination of substantially all of the Concord historical
senior executive compensation and other management expenses
which aggregated $863 net of income taxes for the first
quarter 2004.
-5A-
Following is a summary of the unaudited pro forma combined
results for Tootsie Roll Industries, Inc. and the Concord
Confections business for the first quarter 2004:
2004
Combined
Pro Forma
Net sales..............................$ 97,003
Net earnings...........................$ 12,004
Earnings per share.....................$ .22
The pro forma results are not necessarily indicative of what
actually would have occurred if the acquisition had been
completed as of January 1, 2004, nor are they necessarily
indicative of future consolidated results.
Note 6 - The bank loan is payable in quarterly installments through
August of 2006. As a result of prepayments, the next
quarterly installment is due in March, 2006. The loan is
collateralized by investments in marketable securities and
is subject to other terms and conditions, none of which are
significant. Interest is LIBOR based, and the average rate
was 2.8% in 2005.
-5B-
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 that have affected the accompanying Condensed Statement of
Earnings.
NET SALES: Net change in
First Quarter, 2005
First Quarter vs.
2005 2004 First Quarter, 2004
$97,925 $80,046 22.3%
First quarter 2005 net sales were $97,925 compared to $80,046 in first quarter
2004, an increase of $17,879 or 22.3%. First quarter 2005 sales benefited from
$17,345 of sales from the Concord Confections business which was acquired on
August 30,2004.
First quarter 2005 net sales of $97,925 were down from fourth quarter 2004 net
sales of $105,936. This is not considered unusual, as the first quarter of the
year is historically the company's lowest sales quarter.
COST OF SALES:
Cost of Sales as a
First Quarter Percentage of Net Sales
2005 2004 1st Qtr. 2005 1st Qtr. 2004
$58,476 $45,316 59.7% 56.6%
Cost of sales as a percentage of net sales increased from 56.6% in first quarter
2004 to 59.7% in first quarter 2005. The increase in cost of sales as a
percentage of net sales reflects the inclusion of the Concord Confections
business which has higher costs as a percentage of net sales, various start-up
costs associated with a new production line, generally higher labor costs,
including health insurance and other fringe benefits, and increased
manufacturing plant overhead costs.
OPERATING EARNINGS:
First Quarter, 2005
First Quarter vs.
2005 2004 First Quarter, 2004
$17,159 $16,060 6.8%
-6-
Selling, marketing and administrative expenses rose from $18,670 in the first
quarter 2004 to $22,290 in first quarter 2005, an increase of $3,620 or 19.4%.
The aforementioned increase principally reflects the incremental operating
expenses of the Concord Confections business. However, as a percentage of net
sales, such operating expenses favorably decreased from 23.3% in 2004 to 22.8%
in 2005, reflecting various cost efficiencies achieved from increased
consolidated net sales due to the inclusion of the Concord Confections business.
First quarter earnings from operations were $17,159 and $16,060 in 2005 and
2004, respectively, an increase of $1,099 or 6.8%. Improved first quarter 2005
operating earnings benefited from higher reported net sales and resulting
operating earnings from the inclusion of the Concord Confections business as
discussed above.
NET EARNINGS:
First Quarter, 2005
First Quarter vs.
2005 2004 First Quarter, 2004
$12,506 $11,493 8.8%
First quarter 2005 net earnings were $12,506 compared to first quarter 2004 net
earnings of $11,493. First quarter 2005 earnings per share were $0.23, compared
to $0.21 per share in the prior year comparative period, an increase of $0.02 or
9.5%.
Other income, net was $1,207 in first quarter 2005 compared to $1,275 in first
quarter 2004. Other income, net in 2005 includes $570 of increased interest
expense and $487 of decreased investment income reflecting the financing costs
of the Concord Confections business acquired on August 30, 2004. First quarter
2005 other income, net benefited from $472 of foreign exchange and translation
gains, $251 of real estate rental income from the Concord Confections business,
and $279 of net income from the company's Spanish joint venture acquired as part
of the Concord Confections business.
The consolidated effective income tax rate favorably decreased from 33.7% in
first quarter 2004 to 32.4% in first quarter 2005. This improvement generally
reflects the statutory reduction in the U.S. federal income tax rate in 2005
for US manufacturing activities as well as lower effective rates for foreign
taxes.
In addition to the factors discussed above, earnings per share benefited from
fewer shares outstanding as a result of the company's share repurchases.
-6A-
LIQUIDITY AND CAPITAL RESOURCES:
The company's current ratio (current assets divided by current liabilities) was
2.2 to 1 as of the end of first quarter 2005 as compared to 3.6 to 1 as of the
end of first quarter 2004 and 2.3 to 1 as of the end of fourth quarter 2004.
Net working capital was $101,207 as of the end of first quarter 2005 as compared
to $110,376 and $174,525 as of the end of fourth quarter 2004 and first quarter
2004, respectively. The aforementioned net working capital amounts are
principally reflected in aggregate cash and cash equivalents and short-term
investments which totalled $71,257 as of the end of first quarter 2005 compared
to $89,358 and $142,290, as of the end of fourth quarter 2004 and first quarter
2004, respectively. In addition, long-term investments, principally debt
securities comprising municipal bonds, were $85,713 as of the end of first
quarter 2005 as compared to $96,640 and $120,705 as of the end of fourth quarter
2004 and first quarter 2004, respectively. Investments in municipal bonds and
other debt securities that matured during first quarters 2005 and 2004 were
generally replaced with debt securities of similar maturities.
The decreases in overall working capital, aggregate cash and cash equivalents,
and short-term and long-term investments from first quarter 2004 reflects the
company's financing of the Concord Confections business on August 30,2004 for
an adjusted purchase price of approximately $212,587. The aforementioned
adjusted purchase price reflects the Company's recovery subsequent to the end of
first quarter 2005 of approximately $6,755 relating to the final determination
of the required minimum working capital amount under terms of the Concord
purchase contract.
Net cash provided by operating activities was $4,796 for first quarter 2005,
whereas $5,549 of net cash was used in operating activities in first quarter
2004. The aforementioned net change in net cash provided by/used in operating
activities principally reflects the Company's pre-funding of the annual cost of
certain defined contribution employee benefit plans in 2004, reflected as a
prepaid expense, which was not pre-funded in 2005; the timing of payments
relating to accounts payable also contributed to such net change. Capital
expenditures for first quarter 2005 and 2004 were $4,626 and $3,191,
respectively. Capital expenditures for the 2005 year are anticipated to be
generally in line with historical annualized spending after adjusting for the
addition of the Concord Confections business, and are to be funded from the
company's cash flow from operations and internal sources.
As of the end of first quarter 2005, the company has $77,000 outstanding
relating to its bank loan in connection with the financing of the Concord
Confections acquisition on August 30,2004. As a result of prepayments on this
loan, the next required installment of $9,667 is due in March 2006. The balance
of the bank loan is due in later 2006. The company anticipates making
substantial prepayments on this loan in 2005 which will be funded from cash
flows from operations and maturities of investments in marketable securities.
-6B-
Cash dividends declared in first quarter 2005 and 2004 were $3,655 and $3,575,
respectively. However, dividends paid in cash were $7,315 and $7,164, in first
quarter 2005 and 2004, respectively. The difference between dividends declared
and dividends paid is due to payment in the first quarter of a dividend declared
in the fourth quarter.
The company repurchased and retired $6,390 and $6,182 of its outstanding common
stock during first quarter 2005 and 2004, 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
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 effect of changes in foreign currencies
on the company's foreign subsidiaries; the company's reliance on third-party
vendors for various goods and services; the effect of changes in assumptions,
including discount rates and profit margins, relating to the company's
impairment testing and analysis of its goodwill and trademarks; changes in the
confectionary market place including actions taken by major retailers and
customers; customer and consumer response to marketing programs and price
adjustments; changes in governmental laws and regulations including taxes; the
overall competitive environment in the company's industry; and changes in
assumptions and judgments discussed under the heading "Critical Accounting
Policies of the company's MD&A" included in the 2004 annual report and 10-K.
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 ABOUT MARKET RISK:
The company is exposed to various market risks, including fluctuations in sugar,
corn syrup, edible oils, cocoa and packaging costs. The company is exposed to
exchange rate fluctuations in the Canadian dollar which is the currency used
for a portion of the operating expenses at its Canadian plants. 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, 2004.
-6C-
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 April 2, 2005 and, based on their evaluation, the chief
executive officer and chief financial officer have concluded that these controls
and procedures are effective. 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.
There has been no change in the company's internal control over financial
reporting that occurred during the company's fiscal quarter ended April 2,
2005 that has materially affected, or is reasonably likely to materially affect,
the company's internal control over financial reporting.
-6D-
PART II - OTHER INFORMATION
TOOTSIE ROLL INDUSTRIES, INC.
AND SUBSIDIARIES
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) Total (b) Average Shares Approximate Dollar
Number of Price Paid per Purchased as Part of Value of Shares that
May Yet Be Purchased
Shares Share Publicly Announced Plans Under the Plans or
Period Purchased Or Programs or Programs
JAN 1 TO JAN 29 - $ . NOT APPLICABLE NOT APPLICABLE
JAN 30 TO FEB 26 - . NOT APPLICABLE NOT APPLICABLE
FEB 27 TO APR 2 215,700 29.59 NOT APPLICABLE NOT APPLICABLE
TOTAL 215,700 $ 29.59
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 6. EXHIBITS
Exhibits 31.1 and 31.2 - Certifications 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.
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 11, 2005 BY:/S/Melvin J. Gordon
Melvin J. Gordon
Chairman of the Board
Date: MAY 11, 2005 BY:/s/G. Howard Ember, Jr.
G. Howard Ember, Jr.
Vice President - Finance
-7-
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) designed such disclosure controls over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) 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
d) 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: May 11, 2005
By: /s/Melvin J. Gordon
Melvin J. Gordon
Chairman and Chief Executive Officer
-7A-
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:
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) designed such disclosure controls over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) 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
d) 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: May 11, 2005
By: /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 April 2, 2005 (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: May 11, 2005 /s/Melvin J. Gordon
Melvin J. Gordon
Chairman and Chief
Executive Officer
Dated: May 11, 2005 /s/G. Howard Ember, Jr.
G. Howard Ember, Jr.
V.P./Finance and
Chief Financial Officer
-7C-