TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data) |
|
|
|
For the year ended December 31, |
|
|
|
2011 |
|
2010 |
|
2009 |
|
|
Net product sales |
|
$528,369 |
|
|
$517,149 |
|
|
$495,592 |
|
|
|
Rental and royalty revenue |
|
4,136 |
|
|
4,299 |
|
|
3,739 |
|
|
|
Total revenue |
|
532,505 |
|
|
521,448 |
|
|
499,331 |
|
|
|
Product cost of goods sold |
|
365,225 |
|
|
349,334 |
|
|
319,775 |
|
|
|
Rental and royalty cost |
|
1,038 |
|
|
1,088 |
|
|
852 |
|
|
|
Total costs |
|
366,263 |
|
|
350,422 |
|
|
320,627 |
|
|
|
Product gross margin |
|
163,144 |
|
|
167,815 |
|
|
175,817 |
|
|
|
Rental and royalty gross margin |
|
3,098 |
|
|
3,211 |
|
|
2,887 |
|
|
|
Total gross margin |
|
166,242 |
|
|
171,026 |
|
|
178,704 |
|
|
|
Selling, marketing and administrative expenses |
|
108,276 |
|
|
106,316 |
|
|
103,755 |
|
|
|
Impairment charges |
|
— |
|
|
— |
|
|
14,000 |
|
|
|
Earnings from operations |
|
57,966 |
|
|
64,710 |
|
|
60,949 |
|
|
|
Other income (expense), net |
|
2,946 |
|
|
8,358 |
|
|
2,100 |
|
|
|
Earnings before income taxes |
|
60,912 |
|
|
73,068 |
|
|
63,049 |
|
|
|
Provision for income taxes |
|
16,974 |
|
|
20,005 |
|
|
9,892 |
|
|
|
Net earnings |
|
$43,938 |
|
|
$53,063 |
|
|
$53,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$43,938 |
|
|
$53,063 |
|
|
$53,157 |
|
|
|
Other comprehensive earnings (loss) |
|
(8,740 |
) |
|
1,183 |
|
|
2,845 |
|
|
|
Comprehensive earnings |
|
$35,198 |
|
|
$54,246 |
|
|
$56,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained earnings at beginning of year. |
|
$135,866 |
|
|
$147,687 |
|
|
$144,949 |
|
|
|
Net earnings |
|
43,938 |
|
|
53,063 |
|
|
53,157 |
|
|
|
Cash dividends |
|
(18,360 |
) |
|
(18,078 |
) |
|
(17,790 |
) |
|
|
Stock dividends |
|
(47,175 |
) |
|
(46,806 |
) |
|
(32,629 |
) |
|
|
Retained earnings at end of year |
|
$114,269 |
|
|
$135,866 |
|
|
$147,687 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
$0.76 |
|
|
$0.90 |
|
|
$0.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Common and Class B Common shares outstanding |
|
57,892 |
|
|
58,685 |
|
|
59,425 |
|
|
(The accompanying notes are an integral part of these statements.) |
|
|
CONSOLIDATED STATEMENTS OF Financial Position TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data) |
|
Assets |
|
December 31, |
|
|
|
|
|
2011 |
|
2010 |
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$78,612 |
|
|
$115,976 |
|
|
|
|
Investments |
|
10,895 |
|
|
7,996 |
|
|
|
|
Accounts receivable trade, less allowances of $1,731 and $1,531 |
|
41,895 |
|
|
37,394 |
|
|
|
|
Other receivables |
|
3,391 |
|
|
9,961 |
|
|
|
|
Inventories: |
|
|
|
|
|
|
|
|
|
Finished goods and work-in-process |
|
42,676 |
|
|
35,416 |
|
|
|
|
Raw materials and supplies |
|
29,084 |
|
|
21,236 |
|
|
|
|
Prepaid expenses |
|
5,070 |
|
|
6,499 |
|
|
|
|
Deferred income taxes |
|
578 |
|
|
689 |
|
|
|
|
Total current assets |
|
212,201 |
|
|
235,167 |
|
|
|
PROPERTY, PLANT AND EQUIPMENT, at cost: |
|
|
|
|
|
|
|
|
|
Land |
|
21,939 |
|
|
21,696 |
|
|
|
|
Buildings |
|
107,567 |
|
|
102,934 |
|
|
|
|
Machinery and equipment |
|
322,993 |
|
|
307,178 |
|
|
|
|
Construction in progress |
|
2,598 |
|
|
9,243 |
|
|
|
|
|
|
455,097 |
|
|
440,974 |
|
|
|
|
Less—Accumulated depreciation |
|
242,935 |
|
|
225,482 |
|
|
|
|
Net property, plant and equipment |
|
212,162 |
|
|
215,492 |
|
|
|
OTHER ASSETS: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
73,237 |
|
|
73,237 |
|
|
|
|
Trademarks |
|
175,024 |
|
|
175,024 |
|
|
|
|
Investments |
|
96,161 |
|
|
64,461 |
|
|
|
|
Split dollar officer life insurance |
|
74,209 |
|
|
74,441 |
|
|
|
|
Prepaid expenses |
|
3,212 |
|
|
6,680 |
|
|
|
|
Equity method investment |
|
3,935 |
|
|
4,254 |
|
|
|
|
Deferred income taxes |
|
7,715 |
|
|
9,203 |
|
|
|
|
Total other assets |
|
433,493 |
|
|
407,300 |
|
|
|
|
Total assets |
|
$857,856 |
|
|
$857,959 |
|
|
|
Liabilities and Shareholders’ Equity |
|
December 31, |
|
|
|
|
|
2011 |
|
2010 |
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$10,683 |
|
|
$9,791 |
|
|
|
|
Dividends payable |
|
4,603 |
|
|
4,529 |
|
|
|
|
Accrued liabilities |
|
43,069 |
|
|
44,185 |
|
|
|
|
Total current liabilities |
|
58,355 |
|
|
58,505 |
|
|
|
NONCURRENT LIABILITES: |
|
|
|
|
|
|
|
|
|
Deferred income taxes |
|
43,521 |
|
|
47,865 |
|
|
|
|
Postretirement health care and life insurance benefits |
|
26,108 |
|
|
20,689 |
|
|
|
|
Industrial development bonds |
|
7,500 |
|
|
7,500 |
|
|
|
|
Liability for uncertain tax positions |
|
8,345 |
|
|
9,835 |
|
|
|
|
Deferred compensation and other liabilities |
|
48,092 |
|
|
46,157 |
|
|
|
|
Total noncurrent liabilities |
|
133,566 |
|
|
132,046 |
|
|
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
Common stock, $.69-4/9 par value—120,000 shares authorized—36,479 and 36,057 respectively, issued |
|
25,333 |
|
|
25,040 |
|
|
|
|
Class B common stock, $.69-4/9 par value—40,000 shares authorized—21,025 and 20,466 respectively, issued |
|
14,601 |
|
|
14,212 |
|
|
|
|
Capital in excess of par value |
|
533,677 |
|
|
505,495 |
|
|
|
|
Retained earnings, per accompanying statement |
|
114,269 |
|
|
135,866 |
|
|
|
|
Accumulated other comprehensive loss |
|
(19,953 |
) |
|
(11,213 |
) |
|
|
|
Treasury stock (at cost)—71 shares and 69 shares, respectively |
|
(1,992 |
) |
|
(1,992 |
) |
|
|
|
Total shareholders’ equity |
|
665,935 |
|
|
667,408 |
|
|
|
|
Total liabilities and shareholders’ equity |
|
$857,856 |
|
|
$857,959 |
|
|
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands)
|
|
|
|
|
|
For the year ended December 31, |
|
|
|
|
|
|
|
2011 |
|
2010 |
|
2009 |
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$43,938 |
|
|
$53,063 |
|
|
$53,157 |
|
|
|
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
19,229 |
|
|
18,279 |
|
|
17,862 |
|
|
|
|
|
|
Impairment charges |
|
— |
|
|
— |
|
|
14,000 |
|
|
|
|
|
|
Impairment of equity method investment
|
|
— |
|
|
— |
|
|
4,400 |
|
|
|
|
|
|
Loss from equity method investment
|
|
194 |
|
|
342 |
|
|
233 |
|
|
|
|
|
|
Amortization of marketable security premiums
|
|
1,267 |
|
|
522 |
|
|
320 |
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(5,448 |
) |
|
717 |
|
|
(5,899 |
) |
|
|
|
|
|
Other receivables
|
|
3,963 |
|
|
(2,373 |
) |
|
(2,088 |
) |
|
|
|
|
|
Inventories
|
|
(15,631 |
) |
|
(1,447 |
) |
|
455 |
|
|
|
|
|
|
Prepaid expenses and other assets
|
|
5,106 |
|
|
4,936 |
|
|
5,203 |
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
84 |
|
|
2,180 |
|
|
(2,755 |
) |
|
|
|
|
|
Income taxes payable and deferred
|
|
(5,772 |
) |
|
2,322 |
|
|
(12,543 |
) |
|
|
|
|
|
Postretirement health care and life insurance benefits
|
|
2,022 |
|
|
1,429 |
|
|
1,384 |
|
|
|
|
|
|
Deferred compensation and other liabilities
|
|
2,146 |
|
|
2,525 |
|
|
2,960 |
|
|
|
|
|
|
Others
|
|
(708 |
) |
|
310 |
|
|
305 |
|
|
|
|
|
Net cash provided by operating activities |
|
50,390 |
|
|
82,805 |
|
|
76,994 |
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
(16,351 |
) |
|
(12,813 |
) |
|
(20,831 |
) |
|
|
|
|
|
Net purchase of trading securities
|
|
(3,234 |
) |
|
(2,902 |
) |
|
(1,713 |
) |
|
|
|
|
|
Purchase of available for sale securities
|
|
(39,252 |
) |
|
(9,301 |
) |
|
(11,331 |
) |
|
|
|
|
|
Sale and maturity of available for sale securities
|
|
7,680 |
|
|
8,208 |
|
|
17,511 |
|
|
|
|
|
|
Net cash used in investing activities
|
|
(51,157 |
) |
|
(16,808 |
) |
|
(16,364 |
) |
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares repurchased and retired
|
|
(18,190 |
) |
|
(22,881 |
) |
|
(20,723 |
) |
|
|
|
|
|
Dividends paid in cash
|
|
(18,407 |
) |
|
(18,130 |
) |
|
(17,825 |
) |
|
|
|
|
|
Net cash used in financing activities
|
|
(36,597 |
) |
|
(41,011 |
) |
|
(38,548 |
) |
|
|
|
Increase (decrease) in cash and cash equivalents |
|
(37,364 |
) |
|
24,986 |
|
|
22,082 |
|
|
|
|
Cash and cash equivalents at beginning of year |
|
115,976 |
|
|
90,990 |
|
|
68,908 |
|
|
|
|
Cash and cash equivalents at end of year |
|
$78,612 |
|
|
$115,976 |
|
|
$90,990 |
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes paid
|
|
$16,906 |
|
|
$20,586 |
|
|
$22,364 |
|
|
|
|
|
|
Interest paid
|
|
$38 |
|
|
$49 |
|
|
$182 |
|
|
|
|
|
|
Stock dividend issued
|
|
$47,053 |
|
|
$46,683 |
|
|
$32,538 |
|
|
|
(The accompanying notes are an integral part of these statements.) |
|
Answer the following questions.
|
|
|
|