The financial statements of Tootsie Roll are presented below.
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 |
|
|
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. (Give the amounts in thousands of dollars, as shown in Tootsie Roll's annual report.)
1. What did Tootsie Roll report for the amount of inventories in its Consolidated Balance Sheet at December 31, 2011? At December 31, 2010? (Round amounts to thousands.)
|
|
2011 |
|
2010 |
| Inventories |
|
$ |
|
$ |
2. Compute the dollar amount of change and the percentage change in inventories between 2010 and 2011. (Round percentages to 1 decimal place, e.g. 15.4% and other answer to thousands.)
|
|
Change in inventories |
| Dollar amount |
|
$ |
|
| Percentage |
|
|
% |
3. Compute inventory as a percentage of current assets for 2011.(Round answer to 1 decimal place, e.g. 15.4%.)
| Inventory as a percentage of current assets |
|
|
% |
4. What are the (product) cost of goods sold reported by Tootsie Roll for 2011, 2010, and 2009?
|
|
2011 |
|
2010 |
|
2009 |
|
| Product cost of goods sold |
|
$ |
|
$ |
|
$ |
|
5. Compute the ratio of (product) cost of goods sold to net (product) sales in 2011. (Round percentage to 1 decimal place, e.g. 15.2%.)
| Ratio of cost of goods sold to net |
|
|
% |