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EXHIBIT 99.1
Tootsie Roll Industries, Inc.
7401 South Cicero Avenue
Chicago, IL 60629
Phone 773/838-3400
Fax 773/838-3534
Press Release
STOCK TRADED: NYSE FOR IMMEDIATE RELEASE
TICKER SYMBOL: TR Tuesday, October 23, 2018
CHICAGO, ILLINOIS - October 23, 2018 - Ellen R. Gordon, Chairman,
Tootsie Roll Industries, Inc.reported third quarter and nine months
2018 net sales and net earnings.
Third quarter 2018 net sales were $181,505,000 compared to $182,173,000
in third quarter 2017, a decrease of $668,000 which is less than 1%. Third
quarter 2018 net earnings were $26,104,000 compared to $26,933,000 in
third quarter 2017, and net earnings per share were $.41 and $.42 in third
quarter 2018 and 2017, respectively, a decrease of $.01 or 2%.
Nine months 2018 net sales were $387,987,000 compared to $390,495,000
in nine months 2017, a decrease of $2,508,000 which is also less than 1%.
Nine months 2018 net earnings were $44,718,000 compared to $48,879,000
in nine months 2017, and net earnings per share were $.70 and $.75 in nine
months 2018 and 2017, respectively, a decrease of $.05 per share or 7%.
Mrs. Gordon said, "The timing of certain 2018 sales between second and
third quarter in the comparative 2018 and 2017 periods caused our third
quarter 2018 sales to edge lower than third quarter 2017 sales. Third
quarter and nine months 2018 results were adversely affected by
significant increases in freight and delivery expenses. Freight and delivery
expenses reflect higher freight rates driven by increases in fuel costs and
the continuing imbalance between supply and demand for over-the-road
truck delivery.
Increases in wages and employee benefit costs, including unfavorable
experience under our self- insurance programs, and higher legal and
professional fees had an adverse impact on third quarter and nine months
2018 results. Costs relating to quality improvements in product packaging
and start-up of new manufacturing packaging lines being phased into
service also had an unfavorable impact on third quarter and nine months
2018 gross profit margins and results. The Company is continuing its
investments in its manufacturing operations and products to meet new
consumer and customer demands, achieve quality improvements to
increase consumer product acceptance, and realize operational efficiencies
and cost reductions. Manufacturing efficiencies driven by capital
investments and ongoing cost containment programs mitigated some of
these higher input costs and expenses discussed above.
Third quarter 2018 net earnings were adversely affected by unfavorable
foreign exchange, however nine months 2018 results had some favorable
impact from foreign exchange when compared to nine months 2017.
Third quarter and nine months 2018 net earnings benefited from a lower
U.S. federal income tax rate resulting from U.S. tax reform legislation
enacted in December 2017. The Company's effective income tax rates were
21.5% and 31.0% in third quarter 2018 and 2017, respectively, and 22.1%
and 29.8% in nine months 2018 and 2017, respectively. Earnings per
share benefited from stock purchases in the open market resulting in
fewer shares outstanding in both third quarter and nine months 2018."
TOOTSIE ROLL INDUSTRIES, INC.
CONSOLIDATED SUMMARY OF SALES & EARNINGS
FOR THE PERIODS ENDED
SEPTEMBER 30, 2018 & 2017
THIRD QUARTER ENDED
2018 2017
Net Product Sales $ 181,505,000 $ 182,173,000
Net Earnings $ 26,104,000 $ 26,933,000
Net Earnings Per Share * $ .41 $ .42
Average Shares Outstanding * 64,155,000 64,855,000
NINE MONTHS ENDED
2018 2017
Net Product Sales $ 387,987,000 $ 390,495,000
Net Earnings $ 44,718,000 $ 48,879,000
Net Earnings Per Share * $ .70 $ .75
Average Shares Outstanding * 64,268,000 65,155,000
*Based on average shares outstanding adjusted for 3% stock dividends
distributed April 06, 2018 and April 17, 2017
