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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
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 OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
7401 SOUTH CICERO AVENUE, CHICAGO, ILLINOIS 60629
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER: (773) 838-3400
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- --------------------------------------------------------------------------------
COMMON STOCK - PAR VALUE $.69-4/9 PER SHARE NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
CLASS B COMMON STOCK - PAR VALUE $.69-4/9 PER SHARE
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 IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE
CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR
INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM
10-K OR ANY AMENDMENT TO THIS FORM 10-K.
As of March 10, 1998, 15,861,321 shares of Common Stock, par value
$.69-4/9 per share, were outstanding and the aggregate market value of the
Common Stock (based upon the closing price of the stock on the New York Stock
Exchange on such date) held by non-affiliates was approximately $706,814,360.
As of March 10, 1998, 7,536,480 shares of Class B Common Stock, par value
$.69-4/9 per share, were outstanding. Class B Common Stock is not traded on
any exchange, is restricted as to transfer or other disposition, but is
convertible into Common Stock on a share-for-share basis. Upon such
conversion, the resulting shares of Common Stock are freely transferable and
publicly traded. Assuming all 7,536,480 shares of outstanding Class B Common
Stock were converted into Common Stock, the aggregate market value of Common
Stock held by non-affiliates on March 10, 1998 (based upon the closing price
of the stock on the New York Stock Exchange on such date) would have been
approximately $771,606,399. Determination of stock ownership by
non-affiliates was made solely for the purpose of this requirement, and the
Registrant is not bound by these determinations for any other purpose.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Company's Annual Report to Shareholders for
the year ended December 31, 1997 (the "1997 Report") are incorporated by
reference in Parts I and II of this report.
2. Portions of the Company's Definitive Proxy Statement which
will be distributed on or before April 30, 1998 in connection with the
Company's 1998 Annual Meeting of Shareholders (the "1998 Proxy Statement")
are incorporated by reference in Part III of this report.
PART I
ITEM 1. BUSINESS.
Tootsie Roll Industries, Inc. and its consolidated subsidiaries
(the "Company") has been engaged in the manufacture and sale of candy for
over 100 years. This is the only industry segment in which the Company
operates and is its only line of business. The majority of the Company's
products are sold under the familiar registered trademarks TOOTSIE ROLL,
TOOTSIE ROLL POPS, CHILD'S PLAY, TOOTSIE CARAMEL APPLE POPS, CHARMS,
BLOW-POP, BLUE RAZZ, ZIP-A-DEE-DOO-DA-POPS, CELLA'S, MASON DOTS, MASON CROWS,
JUNIOR MINT, CHARLESTON CHEW, SUGAR DADDY AND SUGAR BABIES. The Company
acquired the last four of these trademarks in 1993 along with the
manufacturing assets of the former Chocolate/Caramel Division of Warner
Lambert.
The Company's products are marketed in a variety of packages
designed to be suitable for display and sale in different types of retail
outlets. They are distributed through approximately 100 candy and grocery
brokers and by the Company itself to approximately 15,000 customers
throughout the United States. These customers include wholesale distributors
of candy and groceries, supermarkets, variety stores, chain grocers, drug
chains, discount chains, cooperative grocery associations, warehouse and
membership club stores, vending machine operators, and fund-raising
charitable organizations.
The Company's principal markets are in the United States, Canada
and Mexico. The Company's Mexican plant supplies a very small percentage of
the products marketed in the United States and Canada.
The Company has advertised nationally for many years. Although
nearly all advertising media have been used at one time or another, at
present most of the Company's advertising expenditures are for the airing of
network and syndicated TV and cable and spot television in major markets
throughout the country.
The domestic candy business is highly competitive. The Company
competes primarily with other manufacturers of bar candy and candy of the
type sold in variety, grocery and convenience stores. Although accurate
statistics are not available, the Company believes it is among the ten
largest domestic manufacturers in this field. In the markets in which the
Company competes, the main forms of competition comprise brand recognition as
well as a fair price for our products at various retail price points.
The Company did not have a material backlog of firm orders at the
end of the calendar years 1996 or 1997.
Packaging materials and ingredients used by the Company are readily
obtainable from a number of suppliers at competitive prices. Packaging
material costs, including films, cartons, corrugated containers and waxed
paper, were favorable in 1997. The Company continues to seek competitive
bids to leverage the high volume of annual purchases it makes of these items
and to lower per unit costs. The Company has engaged in hedging transactions
in sugar and corn and may do so in the future if and when advisable. From
time to time the Company changes the size of certain of its products, which
are usually sold at standard retail prices, to reflect significant changes in
raw material costs.
The Company does not hold any material patents, licenses,
franchises or concessions. The Company's major trademarks are registered in
the United States and in many other countries. Continued trademark
protection is of material importance to the Company's business as a whole.
The Company does not expend significant amounts on research or
development activities.
Compliance with Federal, State and local regulations which have
been enacted or adopted regulating the discharge of materials into the
environment, or otherwise relating to the protection of the environment, has
not had a material effect on the capital expenditures, earnings or
competitive position of the Company nor does the Company anticipate any such
material effects from presently enacted or adopted regulations.
The Company employs approximately 1,750 persons.
The Company has found that its sales normally maintain a consistent
level throughout the year except for a substantial upsurge in the third
quarter which reflects sales associated with Halloween. In anticipation of
this high sales period, the Company generally begins its Halloween inventory
build up in the second quarter of each year. The Company historically offers
extended credit terms for sales made under Halloween sales programs. Each
year, after Halloween receivables have been paid, the Company invests funds
in various temporary cash investments.
Revenues from a major customer aggregated approximately 15.9%,
16.2% and 16.0% of total net sales during the years ended December 31, 1997,
1996 and 1995, respectively.
For a summary of sales, net earnings and assets of the Company by
geographic area and additional information regarding the foreign subsidiaries
of the Company, see Note 10 of the Notes to Consolidated Financial Statements
on Page 15 of the Company's Annual Report to Shareholders for the year ended
December 31, 1997 (the "1997 Report") and on Page 4 of the 1997 Report under
the section entitled "International." Note 10 and the aforesaid section are
incorporated herein by reference. Portions of the 1997 Report are filed as
an exhibit to this report.
ITEM 2. PROPERTIES.
The Company owns its principal plant and offices which are located
in Chicago, Illinois in a building consisting of approximately 2,200,000
square feet. The Company utilizes approximately 1,800,000 square feet for
offices, manufacturing and warehousing facilities and leases, or has
available to lease to third parties, approximately 400,000 square feet.
In addition to owning the principal plant and warehousing
facilities mentioned above, the Company leases manufacturing and warehousing
facilities at a second location in Chicago which comprises 138,000 square
feet. The lease is renewable by the Company every five years through June,
2011. The Company also periodically leases additional warehousing space at
this second location as needed on a month to month basis.
Cella's Confections, Inc., a subsidiary, owns a facility in New
York City, containing approximately 60,000 square feet. This facility
consists of manufacturing, warehousing and office space on three floors
containing approximately 48,000 square feet with a below surface level of
approximately 12,000 square feet.
Charms L.P., a subsidiary, owns a facility in Covington, Tennessee,
containing approximately 285,000 square feet of manufacturing, warehousing
and office space.
Cambridge Brands, Inc., a subsidiary, owns a facility in Cambridge,
Massachusetts, containing approximately 142,000 square feet. The facility
consists of manufacturing, warehousing and office space on five floors.
The Company also owns a facility in Mexico City, Mexico, consisting
of approximately 57,000 square feet plus parking lot and yard area comprising
approximately 25,000 square feet. The facility consists of manufacturing,
warehousing and office space.
The Company owns substantially all of the production machinery and
equipment located in the plants in Chicago, New York, Covington (Tennessee),
Cambridge (Massachusetts) and Mexico City. The Company considers that all of
its facilities are well maintained, in good operating condition and
adequately insured.
ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings known to the
Company to which the Company or any of its subsidiaries is a party or of
which any of their property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the Company's shareholders
through the solicitation of proxies or otherwise during the fourth quarter of
1997.
ADDITIONAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.
See the information on Executive Officers set forth in the table in
Part III, Item 10, Page 6 of this report, which is incorporated herein by
reference.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock is traded on the New York Stock
Exchange. The Company's Class B Common Stock is subject to restrictions on
transfer and no market exists for such shares of Class B Common Stock. The
Class B Common Stock is convertible at the option of the holder into shares
of Common Stock on a share for share basis. As of March 10, 1998, there were
approximately 9,500 holders of record of Common and Class B Common Stock.
For information on the market price of, and dividends paid with respect to,
the Company's Common Stock, see the section entitled "1997-1996 Quarterly
Summary of Tootsie Roll Industries, Inc. Stock Prices and Dividends" which
appears on Page 16 of the 1997 Report. This section is incorporated herein
by reference and filed as an exhibit to this report.
ITEM 6. SELECTED FINANCIAL DATA.
See the section entitled "Five Year Summary of Earnings and
Financial Highlights" which appears on Page 17 of the 1997 Report. This
section is incorporated herein by reference and filed as an exhibit to this
report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
See the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on Pages 5-7 of the 1997
Report. This section is incorporated herein by reference and filed as an
exhibit to this report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements, together with the report thereon of Price
Waterhouse LLP dated February 11, 1998, appearing on Pages 8-15 of the 1997
Report and the Quarterly Financial Data on Page 16 of the 1997 Report are
incorporated by reference in this report. With the exception of the
aforementioned information and the information incorporated in Items 1, 5, 6
and 7, the 1997 Report is not to be deemed filed as part of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
See the information with respect to the Directors of the Company which
is set forth in the section entitled "Election of Directors" of the Company's
Definitive Proxy Statement to be used in connection with the Company's 1998
Annual Meeting of Shareholders (the "1998 Proxy Statement"). Except for the
last paragraph of this section relating to the compensation of Directors, this
section is incorporated herein by reference. See the information in the section
entitled "Section 16(a) Beneficial Ownership Reporting Compliance" of the
Company's 1998 Proxy Statement, which section is incorporated herein by
reference. The 1998 Proxy Statement will be filed with the Securities and
Exchange Commission on or before April 30, 1998.
The following table sets forth the information with respect to the
executive officers of the Company:
NAME POSITION (1) AGE
----------------------------------------------------- ---
Melvin J. Gordon* Chairman of the Board
and Chief Executive Officer (2) 78
Ellen R. Gordon* President and Chief
Operating Officer (2) 66
G. Howard Ember Jr. Vice President/Finance 45
John W. Newlin Jr. Vice President/Manufacturing 61
Thomas E. Corr Vice President/Marketing and
Sales 49
James M. Hunt Vice President/Distribution 55
Barry P. Bowen Treasurer 42
*A member of the Board of Directors of the Company.
(1) Mr. and Mrs. Gordon and Messrs. Newlin and Corr have served in the
positions set forth in the table as their principal occupations for more
than the past seven years. Mr. Ember has served in his position for the
past seven years, and in the seven years prior to that, served the
Company in the position of Treasurer and Assistant Vice President of
Finance. Mr. Hunt has served in his position for the past five years
and in the fifteen years prior to that, served the Company in the
positions of Director of Distribution and Assistant Vice President of
Distribution. Mr. Bowen has served in his position for the past seven
years. Mr. and Mrs. Gordon have also served as President and Vice
President, respectively of HDI Investment Corp., a family investment
company.
(2) Melvin J. Gordon and Ellen R. Gordon are husband and wife.
ITEM 11. EXECUTIVE COMPENSATION.
See the information set forth in the section entitled "Executive
Compensation and Other Information" of the Company's 1998 Proxy Statement.
Except for the "Report on Executive Compensation" and "Performance Graph," this
section of the 1998 Proxy Statement is incorporated herein by reference. See
the last paragraph of the section entitled "Election of Directors" of the 1998
Proxy Statement, which paragraph is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
For information with respect to the beneficial ownership of the
Company's Common Stock and Class B Common Stock by the beneficial owners of more
than 5% of said shares and by the management of the Company, see the sections
entitled "Ownership of Common Stock and Class B Common Stock by Certain
Beneficial Owners" and "Ownership of Common Stock and Class B Common Stock by
Management" of the 1998 Proxy Statement. These sections of the 1998 Proxy
Statement are incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K.
(a) Financial Statements.
The following financial statements and schedules are filed as part of
this report:
(1) Financial Statements (filed herewith as part of Exhibit 13):
Report of Independent Accountants
Consolidated Statements of Earnings and Retained Earnings for the
three years ended December 31, 1997
Consolidated Statements of Cash Flows for the three years ended
December 31, 1997
Consolidated Statements of Financial Position at December 31,
1997 and 1996
Notes to Consolidated Financial Statements
(2) Financial Statement Schedules:
Report of Independent Accountants on Financial Statement
Schedules
Schedule of Valuation and Qualifying Accounts for the three years
ended December 31, 1997.
All other schedules are omitted because they are not applicable
or the required information is shown in the financial statements
or notes thereto.
(3) Exhibits required by Item 601 of Regulation S-K:
See Index to Exhibits which appears following Financial
Schedule II.
No reports on Form 8-K were filed during the
year ended December 31, 1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, Tootsie Roll Industries, Inc., has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
TOOTSIE ROLL INDUSTRIES, INC.
By: /s/ Melvin J. Gordon
Melvin J. Gordon, Chairman
of the Board of Directors
and Chief Executive Officer
Date: MARCH 26, 1998
-------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Melvin J. Gordon Chairman of the Board
----------------------- of Directors and Chief
Melvin J. Gordon Executive Officer
(principal executive
officer) March 26, 1998
/s/ Ellen R. Gordon Director, President
----------------------- and Chief Operating
Ellen R. Gordon Officer March 26, 1998
Director March 26, 1998
-----------------------
Charles W. Seibert
/s/ William Touretz Director and Secretary March 26, 1998
-----------------------
William Touretz
Director March 26, 1998
-----------------------
Lana Jane Lewis-Brent
/s/ G. Howard Ember Jr. Vice President, Finance
----------------------- (principal financial
G. Howard Ember Jr. officer and principal
accounting officer) March 26, 1998
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Shareholders of
Tootsie Roll Industries, Inc.
Our audits of the consolidated financial statements referred to in our
report dated February 11, 1998 appearing on Page 15 of the 1997 Annual Report to
Shareholders of Tootsie Roll Industries, Inc. (which report and consolidated
financial statements are incorporated by reference in this Annual Report on Form
10-K) also included an audit of the financial statement schedule listed in Item
14(a) of this Form 10-K. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth herein when
read in conjunction with the related consolidated financial statements
PRICE WATERHOUSE LLP
Chicago, Illinois
February 11, 1998
FINANCIAL SCHEDULE
----------------------
TOOTSIE ROLL INDUSTRIES, INC.
AND SUBSIDIARY COMPANIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
DECEMBER 31, 1997, 1996 AND 1995
Additions
Balance at charged to Balance at
beginning costs and End of
Classification of year expenses Deductions Year
- ------------------------------------------------------------------------------------------------
1997:
Reserve for bad debts $ 1,626,000 $ 338,982 $ 153,982 (1) $ 1,811,000
Reserve for cash
discounts 259,000 7,360,132 7,345,132 (2) 274,000
----------- ----------- ------------ ------------
$ 1,885,000 $ 7,699,114 $ 7,499,114 $ 2,085,000
----------- ----------- ------------ -----------
1996:
Reserve for bad debts $ 1,446,000 $ 476,204 $ 296,204 (1) $ 1,626,000
Reserve for cash
discounts 328,000 6,767,016 6,836,016 (2) 259,000
----------- ----------- ------------ -----------
$ 1,774,000 $ 7,243,220 $ 7,132,220 $ 1,885,000
----------- ----------- ------------ -----------
1995:
Reserve for bad debts $ 1,173,000 563,162 290,162 (1) $ 1,446,000
Reserve for cash
discounts 293,000 6,163,894 6,128,894 (2) 328,000
----------- ----------- ------------ -----------
1,466,000 $ 6,727,056 $ 6,419,056 $ 1,774,000
----------- ----------- ------------ -----------
(1) Accounts receivable written off net of recoveries and exchange rate
movements.
(2) Allowances to customers.
INDEX TO EXHIBITS
2.1 Asset Sale Agreement dated September 29, 1993 between Warner-Lambert
Company and the Company, including a list of omitted exhibits and
schedules. Incorporated by reference to Exhibit 2 to the Company's
Report on Form 8-K dated October 15, 1993; Commission File No. 1-1361.
The Company hereby agrees to provide the Commission, upon request,
copies of any omitted exhibits or schedules required by Item 601(b)(2)
of Regulation S-K.
3.1 Restated Articles of Incorporation. Incorporated by reference to
Exhibit 3.1 of the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1997; Commission File No. 1-1361.
3.2 Amended and Restated By-Laws. Incorporated by reference to Exhibit
3.2 of the Company's Annual Report on Form 10-K for the year ended
December 31, 1996; Commission File No. 1-1361.
3.3 Specimen Class B Common Stock Certificate. Incorporated by reference
to Exhibit 1.1 of the Company's Registration Statement on Form 8-A
dated February 29, 1988.
10.5* Consultation Agreement between the Company and William Touretz dated
December 21, 1979. Incorporated by reference to Exhibit 10.5 of the
Company's Annual Report on Form 10-K for the year ended December 31,
1992; Commission File No. 1-1361.
10.5.1* Modification Agreement between the Company and William Touretz dated
as of December 5, 1984. Incorporated by reference to Exhibit 10.5.1
of the Company's Annual Report on Form 10-K for the year ended
December 31, 1984; Commission File No. 1-1361.
10.5.2* Modification Agreement between the Company and William Touretz dated
as of December 13, 1985. Incorporated by reference to Exhibit 10.5.2
of the Company's Annual Report on Form 10-K for the year ended
December 31, 1985; Commission File No. 1-1361.
10.5.3* Modification Agreement between the Company and William Touretz dated
as of December 17, 1986. Incorporated by reference to Exhibit 10.5.3
of the Company's Annual Report on Form 10-K for the year ended
December 31, 1986; Commission File No. 1-1361.
10.8.1* Excess Benefit Plan. Incorporated by reference to Exhibit 10.8.1 of
the Company's Annual Report on Form 10-K for the year ended December
31, 1990; Commission File No. 1-1361.
10.8.2* Career Achievement Plan of the Company. Incorporated by reference to
Exhibit 10.8.2 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1993; Commission File No. 1-1361.
10.12* Restatement of Split Dollar Agreement (Special Trust) between the
Company and the trustee of the Gordon Family 1993 Special Trust dated
January 31, 1997. Incorporated by reference to Exhibit 10.12 of the
Company's Annual Report on Form 10-K for the year ended December 31,
1996; Commission File No. 1-1361.
10.21* Executive Split Dollar Insurance and Collateral Assignment Agreement
between the Company and G. Howard Ember Jr. dated July 30, 1994.
Incorporated by reference to Exhibit 10.21 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1994; Commission
File No. 1-1361.
10.22* Executive Split Dollar Insurance and Collateral Assignment Agreement
between the Company and John W. Newlin dated July 30, 1994.
Incorporated by reference to Exhibit 10.22 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1994; Commission
File No. 1-1361.
10.23* Executive Split Dollar Insurance and Collateral Assignment Agreement
between the Company and Thomas E. Corr dated July 30, 1994.
Incorporated by reference to Exhibit 10.23 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1994; Commission
File No. 1-1361.
10.24* Executive Split Dollar Insurance and Collateral Assignment Agreement
between the Company and James Hunt dated July 30, 1994. Incorporated
by reference to Exhibit 10.24 of the Company's Annual Report on Form
10-K for the year ended December 31, 1994; Commission File No. 1-1361.
10.25* Form of Change In Control Agreement dated August, 1997 between the
Company and certain executive officers.
10.26* Executive Split Dollar Insurance and Collateral Assignment Agreement
between the Company and Barry Bowen dated April 1, 1997.
13 The following items incorporated by reference herein from the
Company's 1997 Annual Report to Shareholders for the year ended
December 31, 1997 (the "1997 Report"), are filed as Exhibits to this
report:
(i) Information under the section entitled "International" set
forth on Page 4 of the 1997 Report;
(ii) Information under the section entitled "Management's Discussion
and Analysis of Financial Condition and Results of
Operations" set forth on Pages 5-7 of the 1997 Report;
(iii) Consolidated Statements of Earnings and Retained Earnings
for the three years ended December 31, 1997 set forth on
Page 8 of the 1997 Report;
(iv) Consolidated Statements of Financial Position at December 31,
1997 and 1996 set forth on Pages 9-10 of the 1997 Report;
(v) Consolidated Statements of Cash Flow for the three years ended
December 31, 1997 set forth on Page 11 of the 1997 Report;
(vi) Notes to Consolidated Financial Statements set forth on
Pages 12-15 of the 1997 Report;
(vii) Report of Independent Accountants set forth on Page 15 of
the 1997 Report;
(viii) Quarterly Financial Data set forth on Page 16 of the 1997
Report;
(ix) Information under the section entitled "1997-1996 Quarterly
Summary of Tootsie Roll Industries, Inc. Stock Prices and
Dividends" set forth on Page 16 of the 1997 Report; and
(x) Information under the section entitled "Five Year Summary of
Earnings and Financial Highlights" set forth on Page 17 of
the 1997 Report.
21 List of Subsidiaries of the Company.
27 Financial Data Schedule
______________________________________
*Executive compensation plan or arrangement.