Tootsie Roll Industries Inc. (TR, Financial) filed Quarterly Report for the period ended 2010-04-03.
Tootsie Roll Industries Inc. has a market cap of $1.52 billion; its shares were traded at around $27.27 with a P/E ratio of 30.7 and P/S ratio of 3.1. The dividend yield of Tootsie Roll Industries Inc. stocks is 1.2%.TR is in the portfolios of John Keeley of Keeley Fund Management, Chuck Royce of Royce& Associates, Manning & Napier Advisors, Inc.
$60,719 in first quarter 2009, an increase of $7,404. Product cost of goods
sold reflects a $349 increase in deferred compensation expense in first
quarter 2010 compared to first quarter 2009 resulting from changes in the
market value of investments in trading securities relating to compensation
deferred in previous years, and is not reflective of current operating
results. After adjusting for the aforementioned, product cost of goods sold
increased from $60,788 in first quarter 2009 to $67,843 in first quarter
2010, an increase of $7,056 or 11.6%. As a percentage of net product sales,
product cost of goods sold increased from 64.6% in first quarter 2009 to
66.0% in first quarter 2010, an increase of 1.4% as a percent of sales. This
unfavorable increase principally reflects higher ingredient unit costs,
primarily relating to sugar. The Company expects its sugar and most other
ingredient costs to be significantly higher throughout 2010 compared to 2009.
Selling, marketing and administrative expenses were $25,326 in first quarter
2010 compared to $22,133 in first quarter 2009, an increase of $3,193.
Selling, marketing and administrative expenses reflect a $1,264 increase in
deferred compensation expense in first quarter 2010 compared to first quarter
2009 resulting from changes in the market value of investments in trading
securities relating to compensation deferred in previous years, and is not
reflective of current operating results. Adjusting for the aforementioned,
selling, marketing and administrative expenses increased from $22,391 in
first quarter 2009 to $24,320 in first quarter 2010, an increase of $1,929 or
8.6%. As a percent of net product sales, these adjusted expenses favorably
decreased from 23.8% of net product sales in first quarter 2009 to 23.6% of
product sales in 2010. This favorable decrease in such expenses principally
reflects the favorable benefits of higher sales volumes partially offset by
higher freight, delivery and warehousing and distribution expenses.
Earnings from operations were $10,629 in first quarter 2010 compared to
$11,963 in first quarter 2009, a decrease of $1,334. Earnings from
operations includes changes in deferred compensation liabilities relating to
corresponding changes in the market value of trading securities that hedge
these liabilities as discussed above. Adjusting for the aforementioned net
deferred compensation change of $1,613, operating earnings were $11,915 and
$11,636 in first quarter 2010 and first quarter 2009, respectively, an
increase of $279 or 2.4%; and as a percentage of net product sales, adjusted
operating earnings were 11.5% and 12.4% in first quarter 2010 and 2009,
respectively, a decrease of 0.9% as a percent of net product sales.
Management believes this comparison is more reflective of the underlying
operations of the Company. This decrease principally reflects the adverse
effects of higher ingredient costs and higher freight, distribution and
warehousing expenses as discussed above.
Other income (expense), net, was $3,416 in first quarter 2010 compared to
$(380) in first quarter 2009, an increase of $3,796. This increase
principally reflects a $2,425 favorable improvement in foreign exchange
transactions, and a $1,613 favorable net increase in the fair value of
trading securities investments used to hedge deferred compensation
liabilities. The income (expense), on such trading securities was $1,286 and
$(327) in first quarter 2010 and first quarter 2009, respectively. Such
income or (expense)was substantially offset by a like amount of (expense) or
income in aggregate product cost of goods sold and selling, marketing, and
administrative expenses in the respective years as discussed above. The
first quarter 2010 income principally reflects market appreciation in the
equity markets and the first quarter 2009 (expense) principally reflects the
market decline in the equity markets in the respective periods.
Net cash used in investing activities was $5,816 in first quarter 2010
compared to $6,311 in first quarter 2009. Cash flows from investing
activities reflect capital expenditures of $3,400 and $7,287 in first quarter
2010 and first quarter 2009, respectively. The first quarter 2010 and 2009
capital additions include $468 and $473, respectively, relating to computer
systems and related implementation. Capital expenditures for the 2010 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.
The Company's current ratio (current assets divided by current liabilities)
was 3.6 to 1 as of the end of first quarter 2010 as compared to 3.4 to 1 as
of the end of first quarter 2009 and 3.8 to 1 as of the end of fourth quarter
2009. Net working capital was $157,373 as of the end of first quarter 2010
as compared to $124,384 and $155,812 as of the end of first quarter 2009 and
fourth quarter 2009, respectively. The aforementioned net working capital
amounts are principally reflected in aggregate cash and cash equivalents and
short-term investments which totaled $85,052 as of the end of first quarter
2010 compared to $70,031 and $99,653, as of the end of first quarter 2009 and
fourth quarter 2009, respectively. In addition, long term investments,
principally debt securities comprising municipal bonds, were $62,020
(including $8,010 of Jefferson County auction rate securities (ARS) discussed
below) as of the end of first quarter 2010, as compared to $50,280 and
$58,136 as of the end of first quarter 2009 and fourth quarter 2009,
respectively. Aggregate cash and cash equivalents and short and long-term
investments were $147,072, $120,311, $157,789, for first quarter ended 2010
and 2009, and fourth quarter 2009, respectively. Investments in municipal
bonds and other debt securities that matured during first quarters 2010 and
2009 were generally used to purchase the Company's common stock or were
replaced with debt securities of similar maturities.
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Tootsie Roll Industries Inc. has a market cap of $1.52 billion; its shares were traded at around $27.27 with a P/E ratio of 30.7 and P/S ratio of 3.1. The dividend yield of Tootsie Roll Industries Inc. stocks is 1.2%.TR is in the portfolios of John Keeley of Keeley Fund Management, Chuck Royce of Royce& Associates, Manning & Napier Advisors, Inc.
Highlight of Business Operations:
Product cost of goods sold were $68,123 in first quarter 2010 compared to$60,719 in first quarter 2009, an increase of $7,404. Product cost of goods
sold reflects a $349 increase in deferred compensation expense in first
quarter 2010 compared to first quarter 2009 resulting from changes in the
market value of investments in trading securities relating to compensation
deferred in previous years, and is not reflective of current operating
results. After adjusting for the aforementioned, product cost of goods sold
increased from $60,788 in first quarter 2009 to $67,843 in first quarter
2010, an increase of $7,056 or 11.6%. As a percentage of net product sales,
product cost of goods sold increased from 64.6% in first quarter 2009 to
66.0% in first quarter 2010, an increase of 1.4% as a percent of sales. This
unfavorable increase principally reflects higher ingredient unit costs,
primarily relating to sugar. The Company expects its sugar and most other
ingredient costs to be significantly higher throughout 2010 compared to 2009.
Selling, marketing and administrative expenses were $25,326 in first quarter
2010 compared to $22,133 in first quarter 2009, an increase of $3,193.
Selling, marketing and administrative expenses reflect a $1,264 increase in
deferred compensation expense in first quarter 2010 compared to first quarter
2009 resulting from changes in the market value of investments in trading
securities relating to compensation deferred in previous years, and is not
reflective of current operating results. Adjusting for the aforementioned,
selling, marketing and administrative expenses increased from $22,391 in
first quarter 2009 to $24,320 in first quarter 2010, an increase of $1,929 or
8.6%. As a percent of net product sales, these adjusted expenses favorably
decreased from 23.8% of net product sales in first quarter 2009 to 23.6% of
product sales in 2010. This favorable decrease in such expenses principally
reflects the favorable benefits of higher sales volumes partially offset by
higher freight, delivery and warehousing and distribution expenses.
Earnings from operations were $10,629 in first quarter 2010 compared to
$11,963 in first quarter 2009, a decrease of $1,334. Earnings from
operations includes changes in deferred compensation liabilities relating to
corresponding changes in the market value of trading securities that hedge
these liabilities as discussed above. Adjusting for the aforementioned net
deferred compensation change of $1,613, operating earnings were $11,915 and
$11,636 in first quarter 2010 and first quarter 2009, respectively, an
increase of $279 or 2.4%; and as a percentage of net product sales, adjusted
operating earnings were 11.5% and 12.4% in first quarter 2010 and 2009,
respectively, a decrease of 0.9% as a percent of net product sales.
Management believes this comparison is more reflective of the underlying
operations of the Company. This decrease principally reflects the adverse
effects of higher ingredient costs and higher freight, distribution and
warehousing expenses as discussed above.
Other income (expense), net, was $3,416 in first quarter 2010 compared to
$(380) in first quarter 2009, an increase of $3,796. This increase
principally reflects a $2,425 favorable improvement in foreign exchange
transactions, and a $1,613 favorable net increase in the fair value of
trading securities investments used to hedge deferred compensation
liabilities. The income (expense), on such trading securities was $1,286 and
$(327) in first quarter 2010 and first quarter 2009, respectively. Such
income or (expense)was substantially offset by a like amount of (expense) or
income in aggregate product cost of goods sold and selling, marketing, and
administrative expenses in the respective years as discussed above. The
first quarter 2010 income principally reflects market appreciation in the
equity markets and the first quarter 2009 (expense) principally reflects the
market decline in the equity markets in the respective periods.
Net cash used in investing activities was $5,816 in first quarter 2010
compared to $6,311 in first quarter 2009. Cash flows from investing
activities reflect capital expenditures of $3,400 and $7,287 in first quarter
2010 and first quarter 2009, respectively. The first quarter 2010 and 2009
capital additions include $468 and $473, respectively, relating to computer
systems and related implementation. Capital expenditures for the 2010 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.
The Company's current ratio (current assets divided by current liabilities)
was 3.6 to 1 as of the end of first quarter 2010 as compared to 3.4 to 1 as
of the end of first quarter 2009 and 3.8 to 1 as of the end of fourth quarter
2009. Net working capital was $157,373 as of the end of first quarter 2010
as compared to $124,384 and $155,812 as of the end of first quarter 2009 and
fourth quarter 2009, respectively. The aforementioned net working capital
amounts are principally reflected in aggregate cash and cash equivalents and
short-term investments which totaled $85,052 as of the end of first quarter
2010 compared to $70,031 and $99,653, as of the end of first quarter 2009 and
fourth quarter 2009, respectively. In addition, long term investments,
principally debt securities comprising municipal bonds, were $62,020
(including $8,010 of Jefferson County auction rate securities (ARS) discussed
below) as of the end of first quarter 2010, as compared to $50,280 and
$58,136 as of the end of first quarter 2009 and fourth quarter 2009,
respectively. Aggregate cash and cash equivalents and short and long-term
investments were $147,072, $120,311, $157,789, for first quarter ended 2010
and 2009, and fourth quarter 2009, respectively. Investments in municipal
bonds and other debt securities that matured during first quarters 2010 and
2009 were generally used to purchase the Company's common stock or were
replaced with debt securities of similar maturities.
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