TOOTSIE ROLL INDUSTRIES INC
For the period ended Dec 31, 2024. Filed Feb 28, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 28, 2025
TR$38.97-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-29.
0001558370-24-002048
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-28.
0001558370-25-001926
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 88 previous paragraphs and 89 current paragraphs.
44 unchanged; 33 reworded; 10 added; 7 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
The consolidated net product sales for the twelve months of 2024 were $715,530 compared to the twelve months 2023 of $763,252, a decrease of $47,722 or 6.3%. Fourth quarter 2024 net product sales were $191,356 compared to $195,368 in fourth quarter 2023, a decrease of $4,012, or 2.1%. The sales decline in fourth quarter and twelve months 2024 was driven primarily by lower sales volumes. The Company faced a more challenging market in 2024 as customers and consumers became more resistant to higher prices for our products. which were implemented to help restore our margins.
Current report
We have experienced significant increases in input costs, primarily ingredients, packaging materials, labor, and manufacturing maintenance and supply costs from 2021 through 2024. Fourth quarter and twelve months 2024 gross profit
Current report
margins benefited from improvements in plant manufacturing operating efficiencies. However, lower sales volumes adversely affected our results in fourth quarter and twelve months 2024 because a significant portion of our plant overhead costs, and certain other costs and operating expenses, do not decrease with lower sales. The Company uses the Last-In-First-Out (LIFO) method of accounting for inventory and costs of goods sold which results in lower current income taxes during such periods of increasing costs and higher inflation, but this method does charge the most current costs to cost of goods sold and usually accelerates the realization of these higher costs. During fourth quarter 2024, the Company reduced inventories which resulted in a LIFO liquidation. The liquidated inventory was carried at lower costs prevailing in prior years as compared with current costs in 2024, and therefore benefited fourth quarter and twelve months 2024 operating earnings and pre-tax earnings.
Current report
As outlined in Note 1 to the consolidated financial statements, the Company records revenue from net product sales based on accounting guidance. Adjustments for estimated customer cash discounts upon payment, discounts for price adjustments, product returns, allowances, and certain advertising and promotional costs, including consumer coupons, are variable considerations and are recorded as a reduction of net product sales revenue in the same period the related net product sales are recorded. These estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. The Company identified changes in business conditions that changed Management’s estimated current and future liabilities resulting in a $5,665 reduction in accrued liabilities and an increase in net product sales in twelve months 2024.
Current report
Selling, marketing and administrative expenses include freight, delivery and warehousing expenses. These expenses decreased from $65,465 in 2023 to $57,581 in 2024, a decrease of $7,884 or 12.0%. As a percent of net product sales, these adjusted expenses decreased from 8.6% in 2023 to 8.0% in 2024, a 0.6 favorable percentage point change, which generally reflects the benefits of lower freight surcharges and a more favorable freight market.
Current report
On December 3, 2024, the Board of Directors (the “Board”) of the Company revoked its prior action dated December 28, 2018 that permitted management to take appropriate action to preserve the full income tax deductibility of certain amounts under its nonqualified deferred compensation plans in light of changes to Section 162(m) of Internal Revenue Code made by the Tax Cuts and Jobs Act of 2017 (“TCJA”). The Board revoked its authorization after determining that it was no longer feasible, after considering the purpose of these plans, to secure tax deductions on all accrued deferred compensation by further deferring payment amounts, in large part, due to interpretations of TCJA later adopted by the IRS and the subsequent growth of plan account balances due to sustained equity market appreciation. Given this Board action and the resulting expectation that certain additional amounts of deferred compensation will not be tax deductible in future years, the Company concluded that it will be required under generally accepted accounting principles in the United States of America to write off the related deferred tax assets. The adjustment to the deferred tax assets resulted in a non-cash tax charge of $11,010 in fourth quarter 2024. The Company does not anticipate that this write off will result in future cash expenditures other than the Company’s inability to deduct certain deferred compensation payments against future taxable income.
Current report
The Company has been advised that its withdrawal liability would have been $97,500, $102,200 and $96,000 if it had withdrawn from the Plan during 2024, 2023 and 2022 respectively (most recent information provided by the Plan). The most recent decrease in the withdrawal liability as advised by the Plan was primarily driven by an increase in the PBGC interest rates used to value a portion of the present value of vested benefits (the Plan uses a blended interest rate assumption). As discussed below, the Plan was granted $3.4 billion in Special Financial Assistance in July 2024. The withdrawal liability, since it is calculated as of the end of 2023 as if the Company were to have withdrawn in 2024, does not include any of the $3.4 billion of assets received. After receiving the Special Financial Assistance, the Plan will be required to use PBGC interest rates to value all, instead of a portion, of the present value of vested benefits to provide an estimate of the Company’s withdrawal liability. In addition, for withdrawal liability purposes, PBGC regulations require the Special Financial Assistance to be phased-in over a period of time instead of fully recognized immediately.
Current report
The Company’s pension expense for this Plan for twelve months 2024 and 2023 was $3,332 and $3,516, respectively. The aforementioned expense includes surcharges of $1,174 and $1,239 for twelve months 2024 and 2023, respectively, as required under the amended plan of rehabilitation. The decrease in the twelve months 2024 expense compared to twelve months 2023 reflects the effects of lower sales volumes in twelve months 2024, and corresponding reductions in lower production and labor hours worked.
Current report
In June 2024, the PBGC announced that it had approved the Plan’s application for Special Financial Assistance under the American Rescue Plan Act of 2021. Company management understands that this legislation would provide financial assistance from the PBGC to shore up financially distressed multi-employer plans to ensure that they can remain solvent and continue to pay benefits to retirees through 2051 without any reduction in retiree benefits. The Plan advised the Company that it was granted approximately $3.4 billion in Special Financial Assistance funds and received those funds in July 2024. The Company’s actuary believes that it still remains unclear if the Plan can remain solvent through the targeted date of 2051 although as a requirement of the American Rescue Plan Act of 2021, the Plan must remain in “critical status” through 2051 regardless of solvency. The regulations under the aforementioned PBGC financial assistance could result in a higher withdrawal liability even with PBGC financial assistance since those regulations require use of settlement interest rates to value all, instead of a portion, of the present value of vested benefits in determining the Company’s withdrawal liability. In addition, for withdrawal liability purposes, PBGC regulations require the Special Financial Assistance to be phased-in over a period of time instead of fully recognized immediately. While it is uncertain how the requirements imposed by the Special Financial Assistance will impact the Company’s withdrawal liability in the future, the Company’s actuary believes any withdrawal will continue to be limited to the twenty annual payments previously discussed and that those payments will not be affected by Special Financial Assistance regulation.
Current report
The Company is focused on the longer term and therefore is continuing to make investments in plant manufacturing operations to meet new consumer and customer product demands, achieve product quality improvements, expand capacity in certain product lines, and increase operational efficiencies in order to provide genuine value to consumers.
Removed paragraphs (7)
Previous report
The consolidated net product sales for the twelve months of 2023 were $763,252 compared to the twelve months 2022 of $681,440, an increase of $81,812 or 12.0%. Fourth quarter 2023 net product sales were $195,368 compared to $188,180 in fourth quarter 2022, an increase of $7,188, or 3.8%. The sales growth in fourth quarter and twelve months 2023 was driven primarily by higher sales price realization. The timing of earlier pre-Halloween and other sales in third quarter 2023 had some adverse effect on fourth quarter 2023 sales when compared to the comparative quarterly periods for 2022. Effective sales and marketing programs, including Halloween and other seasonal sales programs, contributed to higher sales in fourth quarter and twelve months 2023.
Previous report
including seasonal demands, in 2023. Certain cost and expense reductions did provide some benefit to 2023 gross profit margins.
Previous report
Our input unit costs for ingredients, packaging materials and many manufacturing repairs, supplies and services moved significantly higher in 2023 from 2022 as new supply agreements at higher prices became effective in early 2023. These higher costs in 2023 are incremental to the significant increase in many input costs that we experienced in prior year 2022 when compared to 2021. We believe that the increases in ingredients and packaging materials costs from 2021 through 2023 are the greatest that we have experienced over any two-year period in the last two decades. Limited supply and continuing high demand for materials, as well as some elevated commodity markets and overall inflation, drove up our unit costs for many of our inputs in each of the past two years. The Company uses the Last-In-First-Out (LIFO) method of accounting for inventory and costs of goods sold which results in lower current income taxes during such periods of increasing costs and higher inflation, but this method does charge the most current costs to cost of goods sold and thereby accelerates the realization of these higher costs.
Previous report
Our supply chain improved significantly in 2023 compared to 2022 and we believe that this will continue throughout 2024. However, we remain focused on the supply chain in order to insure that we avoid delays and disruptions which could result in the temporary shutdown of one or more manufacturing lines. Although the availability of labor improved during 2023, we did experience some labor challenges in 2023 at certain of our manufacturing plant locations.
Previous report
The Company has been advised that its withdrawal liability would have been $96,000, $104,300, and $99,300 if it had withdrawn from the Plan during 2022, 2021, and 2020, respectively, which is the most recent information available to the Company. The most recent decrease in the withdrawal liability as advised by the Plan was primarily driven by an increase in the PBGC interest rates used to value a portion of the liability as well as the positive market value investment performance in 2021. Not all mortality and certain other assumption changes made in 2022 have been fully updated in the calculation of the Company’s withdrawal liability had the Company withdrawn from the Plan during 2022 or 2023. Updating these assumptions may result in a change in the Company’s withdrawal liability. The Company’s relative share of the Plan’s contribution base, driven by employer withdrawals, has increased in the last several years, and management believes that this trend could continue indefinitely and add upward pressure on the Company’s withdrawal liability. Based on the above, including the Company’s increase in such union labor hours to meet its higher product demand in 2022 and 2023, and the Plan’s projected insolvency in the next 20 years, management believes that the Company’s withdrawal liability will likely increase further in future years.
Previous report
The Plan advised the Company that it is in the process of applying for benefits available to financial troubled plans under the American Rescue Plan Act of 2021 after having submitted the initial application to the PBGC on March 1, 2023. Company management understands that this legislation would provide financial assistance from the PBGC to shore up financially distressed multi-employer plans to ensure that they can remain solvent and continue to pay benefits to retirees through 2051 without any reduction in retiree benefits. The PBGC final ruling lifts certain investment restrictions imposed by the interim rule and now allows for a split interest rate structure between existing assets and assets acquired with PBGC assistance that should substantially increase the amount of financial assistance available to the Plan. While the Plan’s future solvency will depend significantly on future investment experience and contribution levels even if financial assistance is awarded, many plans previously projected to go insolvent prior to 2051 are now projected to go insolvent closer to, or even beyond 2051, as a result of the final rule. The Company’s actuary advised that the regulations under the aforementioned PBGC financial assistance could result in a higher withdrawal liability even with PBGC financial assistance.
Previous report
During second quarter 2023, the Company and the union concluded negotiations and entered into a new contract, which expires in September 2027, replacing a prior contract, which expired in September 2022. Under terms of this new union contract, the Company is obligated to continue its participation in the Plan. The Company’s pension expense for this Plan for 2023, 2022 and 2021 was $3,516, $3,510 and $3,156, respectively. The aforementioned expense includes surcharges of $1,239, $1,237 and $1,112 in 2023, 2022 and 2021, respectively, as required under the amended rehabilitation plan discussed above.
Reworded paragraphs (33)
Previous wording
The following discussion should be read in conjunction with the other sections of this report, including the consolidated financial statements and related notes contained in Item 8 of this Form 10-K. This section of this Form 10-K generally discusses the twelve months ended December 31, 2023 as compared to the same period of 2022. Discussions comparing the results of the twelve months ended December 31, 2022 as compared to same period of 2021 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Form 10-K for the year ended December 31, 2022.
Current wording
The following discussion should be read in conjunction with the other sections of this report, including the consolidated financial statements and related notes contained in Item 8 of this Form 10-K. This section of this Form 10-K generally discusses the twelve months ended December 31, 2024 as compared to the same period of 2023. Discussions comparing the results of the twelve months ended December 31, 2023 as compared to same period of 2022 can be found in
Previous wording
The Company’s overall financial position remains strong given that aggregate cash, cash equivalents and investments is $427,028 at December 31, 2023, including $87,800 in trading securities discussed below. Cash flows from 2023 operating activities totaled $94,611 compared to $72,051 in 2022, and are discussed in the section entitled Liquidity and Capital Resources. During 2023, the Company paid cash dividends of $25,076, purchased and retired $33,114 of its outstanding shares, and made capital expenditures of $26,796, all of which was financed from internal sources.
Current wording
The Company’s overall financial position remains strong given that aggregate cash, cash equivalents and investments is $526,968 at December 31, 2024, including $105,067 in trading securities discussed below. Cash flows from 2024 operating activities totaled $138,889 compared to $94,611 in 2023, and are discussed in the section entitled Liquidity and Capital Resources. During 2024, the Company paid cash dividends of $25,515, purchased and retired $13,534 of its outstanding shares, and made capital expenditures of $17,997, all of which was financed from internal sources.
Previous wording
The Company’s net working capital was $245,763 at December 31, 2023 compared to $218,894 at December 31, 2022. This increase principally reflects the effects of increased short-term investments and inventories which is discussed below. As of December 31, 2023, the Company’s total cash, cash equivalents and investments, including all long-term investments, was $427,028 compared to $396,926 at December 31, 2022, an increase of $30,102. See Liquidity And Capital Resources section below for discussion. The aforementioned includes $87,800 and $71,208 of investments in trading securities as of December 31, 2023 and 2022, respectively. The Company invests in trading securities to provide an economic hedge for its deferred compensation liabilities, as further discussed herein and in Note 9 of the Company’s Notes to Consolidated Financial Statements.
Current wording
The Company’s net working capital was $246,319 at December 31, 2024 compared to $245,763 at December 31, 2023. As of December 31, 2024, the Company’s total cash, cash equivalents and investments, including all long-term investments, was $526,968 compared to $427,028 at December 31, 2023, an increase of $99,940. See Liquidity And Capital Resources section below for discussion. The aforementioned includes $105,067 and $87,800 of investments in trading securities as of December 31, 2024 and 2023, respectively. The Company invests in trading securities to provide an economic hedge for its deferred compensation liabilities, as further discussed herein and in Note 7 of the Company’s Notes to Consolidated Financial Statements.
Previous wording
Shareholders’ equity increased from $783,171 at December 31, 2022 to $823,422 as of December 31, 2023, which principally reflects 2023 net earnings of $91,912, less cash dividends of $25,076 and share repurchases of $33,114.
Current wording
Shareholders’ equity increased from $823,422 at December 31, 2023 to $870,743 as of December 31, 2024, which principally reflects 2024 net earnings of $86,827, less cash dividends of $25,515 and share repurchases of $13,534.
Previous wording
Product cost of goods sold were $510,737 in 2023 compared to $452,552 in 2022, an increase of $58,185 or 12.9%. Product cost of goods sold includes $814 and $(893) in certain deferred compensation expenses (credits) in 2023 and 2022, respectively. These deferred compensation expenses (credits) principally result from changes in the market value of investments and investment income from trading securities relating to compensation deferred in previous years and are not reflective of current operating results. Adjusting for the aforementioned, product cost of goods sold increased from $453,445 in 2022 to $509,923 in 2023, an increase of $56,478 or 12.5%. As a percent of net product sales, these adjusted costs increased from 66.5% in 2022 to 66.8% in 2023, a 0.3 unfavorable percentage point change. Fourth quarter and twelve months 2023 gross profit margins were adversely affected by increasing costs for ingredients, packaging materials, labor and benefits, and plant manufacturing operating supplies, services, utilities and repairs and maintenance. We also incurred additional costs, including overtime and extended operating shifts for plant manufacturing, to meet our demand,
Current wording
Product cost of goods sold were $468,056 in 2024 compared to $510,737 in 2023, a decrease of $42,681 or 8.4%. Product cost of goods sold includes $803 and $814 in certain deferred compensation expenses in 2024 and 2023, respectively. These deferred compensation expenses principally result from changes in the market value of investments and investment income from trading securities relating to compensation deferred in previous years and are not reflective of current operating results. Adjusting for the aforementioned, product cost of goods sold decreased from $509,923 in 2023 to $467,253 in 2024, a decrease of $42,670 or 8.4%. As a percent of net product sales, these adjusted costs decreased from 66.8% in 2023 to 65.3% in 2024, a 1.5 favorable percentage point change. Certain cost and expense reductions, as well as higher price realizations helped benefit 2024 cost of goods sold and gross profit margins.
Previous wording
In response to these higher input costs, many companies in the consumer products industry have increased selling prices during the 2021 through 2023 period. We have implemented price increases as well with the objective of improving sales price realization in order to pass along some of these higher input costs and restore some of our margin declines. We made progress in restoring our margins in 2023, but we have not yet restored our margins to historical levels. Although the Company continues to monitor its input costs, we are mindful of the effects and limits of passing on all of the above-discussed higher input costs to our customers as well as the final consumers of our products. We are seeing some consumer resistance to higher prices in the confectionary category in 2024 and believe that this trend will likely have some adverse effect on our sales in 2024.
Current wording
In response to increases in input costs in recent years, many companies in the consumer products industry have increased selling prices. We have implemented price increases as well during this period with the objective of improving sales price realization in order to recover our margin declines. Although we made progress in restoring our margins in 2024, cocoa and chocolate costs have moved significantly higher in the markets this year, and we expect to experience even higher cocoa and chocolate costs in 2025 as many of our older supply contracts expire and new contracts at higher costs become effective. Although the Company continues to monitor its input costs, we are mindful of the effects and limits when passing on the above-discussed higher input costs to our customers as well as the final consumers of our products.
Previous wording
Selling, marketing and administrative expenses were $155,012 in 2023 compared to $121,976 in 2022, an increase of $33,036 or 27.1%. Selling, marketing and administrative expenses include $14,675 and $(16,370) in certain deferred compensation expenses (credits) in 2023 and 2022, respectively. These deferred compensation expenses (credits) principally result from changes in the market value of investments and investment income from trading securities relating to compensation deferred in previous years and are not reflective of current operating results. Adjusting for the aforementioned, selling, marketing and administrative expenses increased from $138,346 in 2022 to $140,337 in 2023, an increase of $1,991 or 1.4%. As a percent of net product sales, these adjusted expenses decreased from 20.3% of net product sales in 2022 to 18.4% of net product sales in 2023, a 1.9 favorable percentage point change. Selling, marketing and administrative expenses include freight, delivery and warehousing expenses. These expenses decreased from $67,342 in 2022 to $65,465 in 2023, a decrease of $1,877 or 2.8%. As a percent of net product sales, these adjusted expenses decreased from 9.9% in 2022 to 8.6% in 2022, a 1.3 favorable percentage point change.
Current wording
Selling, marketing and administrative expenses were $152,675 in 2024 compared to $155,012 in 2023, a decrease of $2,337 or 1.5%. Selling, marketing and administrative expenses include $15,521 and $14,675 in certain deferred compensation expenses in 2024 and 2023, respectively. These deferred compensation expenses principally result from changes in the market value of investments and investment income from trading securities relating to compensation deferred in previous years and are not reflective of current operating results. Adjusting for the aforementioned, selling, marketing and administrative expenses decreased from $140,337 in 2023 to $137,154 in 2024, a decrease of $3,183 or 2.3%. As a percent of net product sales, these adjusted expenses increased from 18.4% of net product sales in 2023 to 19.2% of net product sales in 2024, a 0.8 unfavorable percentage point change. The increase in these expenses, as a percentage of net product sales was attributable to lower sales volume in 2024 compared to 2023, primarily due to the impact of employee compensation, that is largely fixed in nature.
Previous wording
The Company has foreign operating businesses in Mexico, Canada and Spain, and exports products to many foreign markets. The Company’s Spanish subsidiary (97% owned by the Company) incurred an operating loss of $828 in 2023 compared to its $1,430 loss in 2022. Company management expects the competitive and business challenges in Spain to continue, however, Company management believes that we will continue to make progress on reducing this operating loss in 2024. Nonetheless, management believes that operating losses at its Spanish subsidiary may continue beyond 2024 and that these future losses, as well as some capital expenditures, may require some additional cash financing.
Current wording
The Company has foreign operating businesses in Mexico, Canada and Spain, and exports products to many foreign markets. The Company’s Spanish subsidiary (97% owned by the Company) incurred an operating loss of $611 in 2024 compared to its $828 loss in 2023. Company management expects the competitive and business challenges in Spain to continue. Management believes that operating losses at its Spanish subsidiary are expected to continue beyond 2025 and that these future losses, as well as some capital expenditures, will likely require additional cash financing.
Previous wording
The Company believes that the carrying values of its goodwill and trademarks have indefinite lives as they are expected to generate cash flows indefinitely. In accordance with current accounting guidance, these indefinite-lived intangible assets are assessed at least annually for impairment as of December 31 or whenever events or circumstances indicate that the carrying values may not be recoverable from future cash flows. No impairments were recorded in 2023, 2022 or 2021. Current accounting guidance provides entities an option of performing a qualitative assessment (a "step-zero" test) before performing a quantitative analysis. If the entity determines, on the basis of certain qualitative factors, that it is more-likely-than-not that the intangibles (goodwill and certain trademarks) are not impaired, the entity would not need to proceed to
Current wording
The Company believes that the carrying values of its goodwill and trademarks have indefinite lives as they are expected to generate cash flows indefinitely. In accordance with current accounting guidance, these indefinite-lived intangible assets are assessed at least annually for impairment as of December 31 or whenever events or circumstances indicate that the carrying values may not be recoverable from future cash flows. No impairments were recorded in 2024, 2023 or 2022. Current accounting guidance provides entities an option of performing a qualitative assessment (a "step-zero" test) before
Previous wording
the two step impairment testing process (quantitative analysis) as prescribed in the guidance. During fourth quarter 2023 (and fourth quarters 2022 and 2021), the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance. For the fair value assessment of certain trademarks where the “step-zero” analysis was not considered appropriate, impairment testing was performed in fourth quarter 2023 (and fourth quarters 2022 and 2021) using discounted cash flows and estimated royalty rates. For these trademarks, holding all other assumptions constant at the test date, a 100 basis point increase in the discount rate or a 100 basis point decrease in the royalty rate would reduce the fair value of these trademarks by approximately 14% and 10%, respectively. Individually, a 100 basis point increase in the discount rate or a 100 basis point decrease in the royalty rate would not result in a potential impairment as of December 31, 2023.
Current wording
performing a quantitative analysis. If the entity determines, on the basis of certain qualitative factors, that it is more-likely-than-not that the intangibles (goodwill and certain trademarks) are not impaired, the entity would not need to proceed to the two step impairment testing process (quantitative analysis) as prescribed in the guidance. During fourth quarter 2024 (and fourth quarters 2023 and 2022), the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance. For the fair value assessment of certain trademarks where the “step-zero” analysis was not considered appropriate, impairment testing was performed in fourth quarter 2024 (and fourth quarters 2023 and 2022) using discounted cash flows and estimated royalty rates and concluded that the trademarks were not impaired. For these trademarks, holding all other assumptions constant, as of December 31, 2024, a 100 basis point increase in the discount rate would reduce the fair value of these trademarks by approximately 12% and a 100 basis point decrease in the royalty rate would increase the fair value of these trademarks by approximately 16%. Individually, a 100 basis point increase in the discount rate or a 100 basis point decrease in the royalty rate would not result in a potential impairment as of December 31, 2024.
Previous wording
Earnings from operations were $101,828 in 2023 compared to $110,755 in 2022, a decrease of $8,927. Earnings from operations include $15,489 and $(17,263) in certain deferred compensation expense (credits) in 2023 and 2022, respectively, which are discussed above. Adjusting for these deferred compensation expenses (credits), adjusted earnings from operations increased from $93,492 in 2022 to $117,317 in 2023, an increase of $23,825 or 25.5%. The above discussed increase in net product sales was the principal driver of higher adjusted operating earnings in 2023 compared to 2022. Although higher 2023 sales contributed to improved operating earnings compared to 2022, higher input costs mitigated much of the benefits of increased sales.
Current wording
Earnings from operations were $100,505 in 2024 compared to $101,828 in 2023, a decrease of $1,323. Earnings from operations include $16,324 and $15,489 in certain deferred compensation expense in 2024 and 2023, respectively, which are discussed above. Adjusting for these deferred compensation expenses, adjusted earnings from operations decreased from $117,317 in 2023 to $116,829 in 2024, a decrease of $488 or 0.4%. The above discussed decrease in net product sales was the principal driver of lower adjusted operating earnings in 2024 compared to 2023.
Previous wording
Other income (expense), net was $18,066 in 2023 compared to $(12,614) in 2022, an increase of $30,680. Other income (expense), net principally reflects $15,489 and $(17,263) of aggregate net gains (losses) and investment income on trading securities in 2023 and 2022, respectively. These trading securities provide an economic hedge of the Company’s deferred compensation liabilities; and the related net gains (losses) and investment income were offset by a like amount of expense (credit) in aggregate product cost of goods sold and selling, marketing, and administrative expenses in the respective years as discussed above. Other income (expense), net includes investment income on available for sale securities of $5,211 and $2,641 in 2023 and 2022, respectively, which reflects both higher interest rates and related investment returns on the Company’s available for sale marketable securities, as well as an increase in the average balances in 2023 on such securities. Other income, net also includes foreign exchange (losses) gains of $(2,803) and $1,307 in 2023 and 2022, respectively.
Current wording
Other income, net was $26,366 in 2024 compared to $18,066 in 2023, an increase of $8,300. Other income, net principally reflects $16,324 and $15,489 of aggregate net gains and investment income on trading securities in 2024 and 2023, respectively. These trading securities provide an economic hedge of the Company’s deferred compensation liabilities; and the related net gains and investment income were offset by a like amount of expense in aggregate product cost of goods sold and selling, marketing, and administrative expenses in the respective years as discussed above. Other income, net includes investment income from available for sale securities of $9,598 and $5,211 in 2024 and 2023, respectively, which reflects both higher interest rates and related investment returns on the Company’s available for sale marketable securities, as well as an increase in the average balances in 2024 on such securities. Other income, net also includes foreign exchange gains (losses) of $511 and $(2,803) in 2024 and 2023, respectively.
Previous wording
The Company’s effective income tax rates were 21.8% and 21.2% in fourth quarter 2023 and 2022, respectively, and 23.4% and 22.7% in twelve months 2023 and 2022, respectively. The increase in the effective tax rates in 2023 generally reflects higher rates for state income tax provisions. A reconciliation of the differences between the U.S. statutory rate and these effective tax rates is provided in Note 4 of the Company’s Notes to Consolidated Financial Statements.
Current wording
The Company’s effective income tax rates were 48.8% and 21.8% in fourth quarter 2024 and 2023, respectively, and 31.6% and 23.4% in twelve months 2024 and 2023, respectively. Excluding the effects of the write-off of deferred tax assets as discussed above, the Company’s effective income tax rates were 23.8% and 21.8% in fourth quarter 2024 and 2023, respectively, and 22.9% and 23.4% in twelve months 2024 and 2023, respectively. A reconciliation of the differences between the U.S. statutory rate and these effective tax rates is provided in Note 4 of the Company’s Notes to Consolidated Financial Statements.
Previous wording
The Company has provided a full valuation allowance on its Spanish subsidiaries’ tax loss carry-forward benefits of $4,836 and $4,497 as of December 31, 2023 and 2022, respectively, because the Company has concluded that it is not more-likely-than-not that these losses will be utilized before their expiration dates. The Spanish subsidiary has a history of net operating losses and it is not known when and if they will generate taxable income in the future.
Current wording
The Company has provided a full valuation allowance on its Spanish subsidiaries’ tax loss carry-forward benefits of $4,681 and $4,836 as of December 31, 2024 and 2023, respectively, because the Company has concluded that it is not more-likely-than-not that these losses will be utilized before their expiration dates. The Spanish subsidiary has a history of net operating losses and it is not known when and if they will generate taxable income in the future.
Previous wording
U.S. tax reform (US Tax Cuts and Jobs Act enacted in December 2017) changed the United States approach to the taxation of foreign earnings to a territorial system by providing a one hundred percent dividends received deduction for certain qualified dividends received from foreign subsidiaries. These provisions of U.S. tax reform significantly impact the accounting for the undistributed earnings of foreign subsidiaries. After carefully considering these facts, the Company determined that it asserts the permanent reinvestment of all of its foreign subsidiaries earnings as of December 31, 2023.
Current wording
U.S. tax reform (the TCJA) changed the United States approach to the taxation of foreign earnings to a territorial system by providing a one hundred percent dividends received deduction for certain qualified dividends received from foreign subsidiaries. These provisions of U.S. tax reform significantly impact the accounting for the undistributed earnings of foreign subsidiaries. After carefully considering these facts, the Company determined that it asserts the permanent reinvestment of all of its foreign subsidiaries’ earnings as of December 31, 2024.
Previous wording
Net earnings were $91,912 in 2023 compared to $75,937 in 2022, and net earnings per share were $1.32 and $1.07 in 2023 and 2022, respectively, an increase of $0.25 per share or 23.4%. Earnings per share in 2023 benefited from the reduction in average shares outstanding resulting from purchases of the Company’s common stock in the open market by the Company. Average shares outstanding decreased from 70,868 in 2022 to 69,827 in 2023 which reflects share repurchases of $33,114 during 2023. Fourth quarter 2023 and 2022 net earnings attributable to Tootsie Roll Industries, Inc. were
Current wording
Net earnings attributable to Tootsie Roll Industries, Inc. were $86,827 in twelve months 2024 compared to $91,912 in 2023, and net earnings per share were $1.22 and $1.28 in 2024 and 2023, respectively, a decrease of $0.06 per share or 4.7%. Fourth quarter 2024 and 2023 net earnings attributable to Tootsie Roll Industries, Inc. were $22,509 and $29,403, respectively, and net earnings per share were $0.32 and $0.41, respectively, a decrease of $0.09 per share or 22.0%. Adjusting for the above-discussed write-off of deferred tax assets relating to deferred compensation, net earnings in fourth quarter 2024 would have been $33,519 compared to $29,403 in fourth quarter 2023, an increase of $4,116 or 14%, and net earnings in twelve months 2024 would have been $97,837 compared to $91,912 in 2023, an increase of $5,925 or 6%. Earnings per share in both fourth quarter and twelve months 2024 benefited by the reduction in average shares outstanding resulting from purchases of the Company’s common stock in the open market by the Company. Average shares outstanding decreased from 71,903 in 2023 to 71,320 in 2024 which reflects share repurchases of $13,534 during 2024.
Previous wording
Beginning in 2012, the Company has received periodic notices from the Bakery and Confectionery Union and Industry International Pension Fund (Plan), a multi-employer defined benefit pension plan for certain Company union employees, that the Plan’s actuary certified the Plan to be in “critical status”, as defined by the Pension Protection Act (PPA) and the Pension Benefit Guaranty Corporation (PBGC); and that a plan of rehabilitation was adopted by the trustees of the Plan (the “Trustees”) in 2012. The Plan’s status was changed to “critical and declining status”, as defined by the PPA and PBGC, for the plan year beginning January 1, 2015, and the Plan was projected to have an accumulated funding deficiency for the 2017 through 2024 plan years. A designation of “critical and declining status” implies that the Plan is expected to become insolvent in the next 20 years. The Company has continued to receive annual notices each year (2016 to 2023) that this Plan remains in “critical and declining status” and is projected to become insolvent within the next 20 years. In 2016, the Company received new notices that the Trustees adopted an updated Rehabilitation Plan effective January 1, 2016, and all annual notices through 2023 have continued to classify the Plan in the “critical and declining status” category.
Current wording
Beginning in 2012, the Company received periodic notices from the Bakery and Confectionery Union and Industry International Pension Fund (Plan), a multi-employer defined benefit pension plan for certain Company union employees, that the Plan’s actuary certified the Plan to be in “critical status”, as defined by the Pension Protection Act (PPA) and the Pension Benefit Guaranty Corporation (PBGC); and that a plan of rehabilitation was adopted by the trustees of the Plan in 2012. The Plan’s status was changed to “critical and declining status”, as defined by the PPA and PBGC, for the plan year beginning January 1, 2015, and this status has continued. In 2016, the Company received new notices that the Plan’s trustees adopted an updated Rehabilitation Plan effective January 1, 2016, and all annual notices through 2024 have continued to classify the Plan in the “critical and declining status” category.
Previous wording
Based on these updated notices, the Plan’s funded percentage (plan investment assets as a percentage of plan liabilities), as defined, were 49.4%, 48.5%, and 48.3% as of the most recent valuation dates available, January 1, 2022, 2021, and 2020, respectively (these valuation dates are as of the beginning of each Plan year). The Plan has recently advised that the information discussed herein, including the Company’s withdrawal liability, is the most current available information. These funded percentages are based on actuarial values, as defined, and do not reflect the actual market value of Plan investments as of these dates. If the market value of investments had been used as of January 1, 2022 the funded percentage would be 56.7% (not 49.4%). As of the January 1, 2022 valuation date (most recent valuation available), only 14% of Plan participants were current active employees, 55% were retired or separated from service and receiving benefits, and 31% were retired or separated from service and entitled to future benefits. The number of current active employee Plan participants as of January 1, 2022 fell 5% from the previous year and 10% over the past two years. When compared to the Plan valuation date of January 1, 2011 (just prior to the Plan being certified to be in “critical status”), current active employee participants have declined 54%, whereas participants who were retired or separated from service and receiving benefits increased 3% and participants who were retired or separated from service and entitled to future benefits increased 8%.
Current wording
Based on these updated notices, the Plan’s funded percentage (plan investment assets as a percentage of plan liabilities), as defined, were 47.0%, 49.3%, and 48.5% as of January 1, 2023, 2022, and 2021, respectively (these valuation dates are as of the beginning of each Plan year). These funded percentages are based on actuarial values, as defined, and do not reflect the actual market value of Plan investments as of these dates. If the market value of investments had been used as of January 1, 2023, the funded percentage would be 43.6% (not 47.0%). As of the January 1, 2023 valuation date (most recent valuation available), only 14% of Plan participants were current active employees, 55% were retired or separated from service and receiving benefits, and 31% were retired or separated from service and entitled to future benefits. The number of current active employee Plan participants as of January 1, 2023 fell 1% from the previous year and 6% over the past two years. When compared to the Plan valuation date of January 1, 2011 (just prior to the Plan being certified to be in “critical status”), current active employee participants have declined 55%, whereas participants who were retired or separated from service and receiving benefits increased 3% and participants who were retired or separated from service and entitled to future benefits increased 6%.
Previous wording
Based on the Company’s most recent actuarial estimates using the information provided by the Plan with respect to the 2022 withdrawal liability (which is the most recent information available to the Company) and certain provisions in ERISA and laws relating to withdrawal liability payments, management believes that the Company’s liability had the Company withdrawn in 2022 would likely be limited to twenty annual payments of $2,714 which have a present value in the range of $31,851 to $43,741 depending on the interest rate used to discount these payments. While the Company’s actuarial consultant did not believe that the Plan will suffer a future mass withdrawal (as defined) of participating employers, in the event of a mass withdrawal, the Company’s annual withdrawal payments would theoretically be payable in perpetuity. Based on the same actuarial estimates, the present value of such perpetuities had a mass withdrawal occurred in 2022 is in the range of $44,472 to $115,808 and would apply in the unlikely event that substantially all employers withdraw from the Plan. The aforementioned is based on a range of valuations and interest rates which the Company’s actuary has advised is
Current wording
Based on the Company’s most recent actuarial estimates using the information provided by the Plan with respect to its 2024 withdrawal liability (based on most recent information provided to the Company) and certain provisions in ERISA and laws relating to withdrawal liability payments, management believes that the Company’s liability had the Company withdrawn in 2024 would likely be limited to twenty annual payments of $2,664 which have a present value in the range of $31,262 to $37,654 depending on the interest rate used to discount these payments. While the Company’s actuarial consultant did not believe that the Plan will suffer a future mass withdrawal (as defined) of participating employers, in the event of a mass withdrawal, the Company’s annual withdrawal payments would theoretically be payable in perpetuity. Based on the same actuarial estimates, had a mass withdrawal occurred in 2024, the present value of such perpetuities is in the range of $43,650 to $69,266 and would apply in the unlikely event that substantially all employers withdraw from the Plan. The aforementioned is based on a range of valuations and interest rates which the Company’s actuary has advised is provided under the statute. Should the Company actually withdraw from the Plan at a future date, a withdrawal liability, which could be higher than the above discussed amounts, could be payable to the Plan.
Previous wording
The Company is currently unable to determine the ultimate outcome of the above discussed multi-employer union pension matter and therefore is unable to determine the effects on its consolidated financial statements, but the ultimate outcome could be material to its consolidated results of operations or cash flows in one or more future periods. See also Note 7 of the Company’s Note to Consolidated Financial Statements on Form 10-K for the year ended December 31, 2023.
Current wording
During second quarter 2023, the Company and the union associated with the Plan concluded negotiations and entered into a new labor contract which expires in September 2027. Under terms of the union contract the Company is obligated to continue its participation in the Plan during the contract period. The Company is unable to determine the ultimate outcome of the above discussed multi-employer union pension matter and therefore is unable to determine the effects on its consolidated financial statements, but the ultimate outcome could have a material adverse effect on the Company’s consolidated results of operations or cash flows in one or more future periods. See also Note 7 of the Company’s Notes to Consolidated Financial Statements on Form 10-K for the year ended December 31, 2024.
Previous wording
Cash flows from operating activities were $94,611, $72,051 and $85,298 in 2023, 2022 and 2021, respectively. The $22,560 increase in cash flows from operating activities from 2022 to 2023 primarily reflects higher net income and a lower investment in net working capital despite a $20,000 contribution to a Voluntary Employee Benefit Association (“VEBA”) trust as discussed below. Inventories increased in 2022 to better meet demand on a timely basis as well as higher input costs. The $13,247 decrease in cash flows from operating activities from 2021 to 2022 primarily reflects increases in inventories during 2022 including higher unit costs for materials, offset by increases in net earnings and accounts receivable due to increased sales.
Current wording
Cash flows from operating activities were $138,889, $94,611 and $72,051 in 2024, 2023 and 2022, respectively. The $44,278 increase in cash flows from operating activities from 2023 to 2024 primarily reflects a lower investment in net working capital. Inventories decreased by $17,296 or 18.2% in 2024 to better meet demand on a timely basis. The $22,560 increase in cash flows from operating activities from 2022 to 2023 primarily reflects increases net earnings during 2023, lower inventories, and changes in deferred income taxes including the write-off of deferred tax assets relating to deferred compensation as discussed above.
Previous wording
The Company manages and controls a VEBA trust, to fund the estimated future costs of certain union employee health, welfare and other benefits. A contribution of $20,000 and $5,000 was made to this trust in 2023 and 2022, respectively; no contribution was made to the trust during 2021. The Company uses these funds to pay the actual cost of such benefits over each union contract period. At December 31, 2023 and 2022, the VEBA trust held $19,126 and $3,879 respectively, of aggregate cash and cash equivalents, which the Company expects to use to pay certain union employee benefits through part or all of 2027. This asset value is included in prepaid expenses and long-term other assets in the Company’s Consolidated Statement of Financial Position and is categorized as Level 1 within the fair value hierarchy.
Current wording
The Company manages and controls a VEBA trust, to fund the estimated future costs of certain union employee health, welfare and other benefits. Contributions of $20,000 and $5,000 were made to this trust in 2023 and 2022, respectively; no contribution was made to the trust during 2024. The Company uses these funds to pay the actual cost of such benefits over each union contract period. At December 31, 2024 and 2023, the VEBA trust held $13,926 and $19,126 respectively, of aggregate cash and cash equivalents, which the Company expects to use to pay certain union employee benefits through part or all of 2027. This asset value is included in prepaid expenses and long-term other assets in the Company’s Consolidated Statement of Financial Position and is categorized as Level 1 within the fair value hierarchy.
Previous wording
Cash flows from investing activities reflect capital expenditures of $26,796, $23,356, and $31,426 in 2023, 2022 and 2021, respectively. The Company is currently exploring a plant expansion, including additional and replacement of, certain processing and packaging lines, to better meet its higher level of demand for certain products on a timelier and more cost effective basis. The Company is currently studying this area and believes that this will take place over the next five years, however, most of the actual expenditures are expected to occur in the next three years. Company management believes that the total cost this expansion, including new machinery, equipment and food processing infrastructure, will approximate $70,000 to $80,000. All capital expenditures have been and are expected to be funded from the Company’s cash flow from operations and internal sources including available for sale securities.
Current wording
Cash flows from investing activities reflect capital expenditures of $17,997, $26,796, and $23,356 in 2024, 2023 and 2022, respectively. The Company is currently pursuing a plant expansion, including additional and replacement of certain processing and packaging lines, to better meet its higher level of forecasted demand for certain products on a timelier and more cost effective basis. The Company expects that this will take place over the next seven years, however, most of the actual expenditures are expected to occur in 2025 and 2026. Company management believes that the total cost of this expansion, including new machinery, equipment and food processing infrastructure, and warehousing will approximate $100,000. All capital expenditures have been and are expected to be funded from the Company’s cash flow from operations and internal sources including available for sale securities.
Previous wording
Financing activities include Company common stock purchases and retirements of $33,114, $31,910, and $30,184 in 2023, 2022 and 2021, respectively. Cash dividends of $25,076, $24,629, and $24,136 were paid in 2023, 2022 and 2021, respectively.
Current wording
Financing activities include Company common stock purchases and retirements of $13,534, $33,114, and $31,910 in 2024, 2023 and 2022, respectively. Cash dividends of $25,515, $25,076, and $24,629 were paid in 2024, 2023 and 2022, respectively.
Previous wording
payment, discounts for price adjustments, product returns, allowances, and certain advertising and promotional costs, including consumer coupons, which are variable consideration and are recorded as a reduction of product sales revenue in the same period the related product sales are recorded. Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. Revenue for net product sales is recognized at a point in time when products are delivered to or picked up by the customer, as designated by customers’ purchase orders, as discussed in Note 1 of the Company’s Notes to Consolidated Financial Statements.
Current wording
As further discussed in Note 1 of the Company’s Notes to Consolidated Financial Statements, the Company follows the revenue recognition guidance in ASC 606. ASC 606 requires adjustments for estimated customer cash discounts upon payment, discounts for price adjustments, product returns, allowances, and certain advertising and promotional costs, including consumer coupons, which are variable consideration and are recorded as a reduction of product sales revenue in the same period the related product sales are recorded. Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. Revenue for net product sales is recognized at a point in time when products are delivered to or picked up by the customer, as designated by customers’ purchase orders, as discussed in Note 1 of the Company’s Notes to Consolidated Financial Statements.
Previous wording
Provisions for bad debts are recorded as selling, marketing and administrative expenses. Write-offs of bad debts did not exceed 0.1% of net product sales in each of 2023, 2022 and 2021, and accordingly, have not been significant to the Company’s financial position or results of operations.
Current wording
Provisions for bad debts are recorded as selling, marketing and administrative expenses. Write-offs of bad debts did not exceed 0.2% of net product sales in each of 2024, 2023 and 2022, and accordingly, have not been significant to the Company’s financial position or results of operations.
Previous wording
Advertising and marketing costs are recorded in the period to which such costs relate. The Company does not defer the recognition of any amounts on its consolidated balance sheet with respect to such costs. The expected cost of future payments to customers for incentives and other trade promotional programs is recorded at the time sale as a reduction of Net product sales. The liabilities associated with these programs are reviewed quarterly and adjusted if the expected utilization rate differs from management’s original estimates. Such adjustments have not historically been material to the Company’s operating results.
Current wording
Advertising and marketing costs are recorded in the period to which such costs relate. The Company does not defer the recognition of any amounts on its consolidated balance sheet with respect to such costs. The expected cost of future payments to customers for incentives and other trade promotional programs is recorded at the time sale as a reduction of Net product sales. The liabilities associated with these programs are reviewed quarterly and adjusted if the expected utilization rate differs from management’s original estimates. Although the Company recorded a $5,665 favorable change in this estimate in 2024, as discussed above, such adjustments have not historically been material to the Company’s operating results.
Previous wording
Deferred income taxes are recognized for future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse. The Company records valuation allowances in situations where the realization of deferred tax assets, including those relating to net operating tax losses, is not more-likely-than-not; and the Company adjusts and releases such valuation allowances when realization becomes more-likely-than-not as defined by accounting guidance. The Company periodically reviews assumptions and estimates of the Company’s probable tax obligations and effects on its liability for uncertain tax positions, using informed judgment which may include the use of third-party consultants, advisors and legal counsel, as well as historical experience.
Current wording
Deferred income taxes are recognized for future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse. The Company records valuation allowances, or may actually adjust or write-off deferred tax assets, in situations where the realization of deferred tax assets, including those relating to net operating tax losses, is not more-likely-than-not; and the Company adjusts and releases such valuation allowances when realization becomes more-likely-than-not as defined by accounting guidance. The Company periodically reviews assumptions and estimates of the Company’s probable tax obligations and effects on its liability for uncertain tax positions, using informed judgment which may include the use of third-party consultants, advisors and legal counsel, as well as historical experience.
Previous wording
Investments classified as available for sale primarily comprise high quality corporate bonds which are generally not sold prior to maturity, which is typically three to five years. The Company uses a “ladder” approach to its maturities so that approximately 20% to 35% of the portfolio matures each year with the objective of achieving higher yields with minimum interest rate risk. The Company also invests in variable rate demand notes (generally long term bonds where interest rates are reset weekly, and provide a weekly “put” which allows the holder to also sell each week with no loss in principal). All investments are reviewed for impairment at each reporting period by comparing the carrying value or amortized cost to the fair market value. In the event that the Company determines that an investment security’s fair value is permanently impaired, the Company will record the amount of the impairment attributable to credit factors in earnings as credit loss expense or, as applicable, a reversal of that expense, with the amount attributable to non-credit factors in other comprehensive income, net of applicable taxes. The Company’s investment policy, which guides investment decisions, is focused on high quality investments which mitigates the risk of impairment. The Company does not invest in Level 3 securities, as defined, but may utilize third-party professional valuation firms as necessary to assist in the determination of the value of investments that utilize Level 3 inputs (as defined by guidance) should any of its investments be downgraded to Level 3.
Current wording
Investments are classified as either available for sale or trading. Investments classified as available for sale primarily comprise high quality corporate bonds which are generally not sold prior to maturity, which is typically three to five years. The Company uses a “ladder” approach to its maturities so that approximately 20% to 35% of the portfolio matures each year with the objective of achieving higher yields with minimum interest rate risk. The Company also invests in variable rate demand notes (generally long term bonds where interest rates are reset weekly, and provide a weekly “put” which allows the holder to also sell each week with no loss in principal). Available for sale investments are reviewed for impairment at each reporting period by comparing the carrying value or amortized cost to the fair market value. In the event that the Company determines that a security’s fair value is permanently impaired, the Company will record the amount of the impairment attributable to credit factors in earnings as credit loss expense or, as applicable, a reversal of that expense, with the amount attributable to non-credit factors in other comprehensive income, net of applicable taxes. The Company’s investment policy, which guides investment decisions, is focused on high quality investments which mitigates the risk of impairment. Investments classified as trading securities primarily comprise mutual funds which are used as an economic hedge against our deferred compensation liabilities. Trading securities are carried at fair value with gains or losses included in other income, net. The Company does not invest in Level 3 securities, as defined, but may utilize third-party professional valuation firms as necessary to assist in the determination of the value of investments that utilize Level 3 inputs (as defined by guidance) should any of its investments be downgraded to Level 3.
Previous wording
volumes. In addition, the estimated cost of packaging modifications associated with weight changes, if applicable, is evaluated. The Company also maintains ongoing cost reduction and productivity improvement programs under which cost savings initiatives are encouraged and progress monitored, and continuously reviews automation and productivity opportunities requiring capital investments. The Company is not able to accurately predict the outcome of these cost savings initiatives and their effects on its future results.
Current wording
In order to address the impact of changes in input and other costs, the Company periodically reviews each item in its product portfolio to ascertain if price realization adjustments or other actions should be taken. These reviews include an evaluation of the risk factors relating to market place acceptance of such changes and their potential effect on future sales volumes. In addition, the estimated cost of packaging modifications associated with weight changes, if applicable, is evaluated. The Company also maintains ongoing cost reduction and productivity improvement programs under which cost savings initiatives are encouraged and progress monitored, and continuously reviews automation and productivity opportunities requiring capital investments. The Company is not able to accurately predict the outcome of these cost savings initiatives and their effects on its future results.
Previous wording
The potential change in fair value of commodity and foreign currency derivative instruments held by the Company at December 31, 2023, assuming a 10% change in the underlying contract price, was $4,458. The analysis only includes commodity and foreign currency derivative instruments and, therefore, does not consider the offsetting effect of changes in the price of the underlying commodity or foreign currency. This amount is not significant compared with the net earnings and shareholders’ equity of the Company.
Current wording
The potential change in fair value of commodity and foreign currency derivative instruments held by the Company at December 31, 2024, assuming a 10% change in the underlying contract price, was $4,709. The analysis only includes commodity and foreign currency derivative instruments and, therefore, does not consider the offsetting effect of changes in the price of the underlying commodity or foreign currency. This amount is not significant compared with the net earnings and shareholders’ equity of the Company.
Previous wording
The majority of the Company’s investments which are classified as available for sale have generally not been sold prior to their maturity, which is typically three to five years. Approximately 20% to 35% of this investment portfolio matures each year. This “ladder” approach to investing limits the Company’s exposure to interest rate fluctuations. The Company also invests in variable rate demand notes which have interest rates that are reset weekly and can be “put back” and sold each week through a remarketing agent, generally a large financial broker, which also substantially eliminates the Company’s exposure to interest rate fluctuations on the principal invested. The accompanying chart summarizes the maturities of the Company’s investments in debt securities at December 31, 2023.
Current wording
The majority of the Company’s investments which are classified as available for sale have generally not been sold prior to their maturity, which is typically three to five years. Approximately 20% to 35% of this investment portfolio matures each year. This “ladder” approach to investing limits the Company’s exposure to interest rate fluctuations. The Company also invests in variable rate demand notes which have interest rates that are reset weekly and can be “put back” and sold each week through a remarketing agent, generally a large financial broker, which also substantially eliminates the Company’s
Previous wording
The Company’s outstanding debt at December 31, 2023 and 2022 was $7,500 in an industrial revenue bond in which interest rates reset each week based on the current market rate. Therefore, the Company does not believe that it has significant interest rate risk with respect to its interest bearing debt.
Current wording
The Company’s outstanding debt at December 31, 2024 and 2023 was $7,500 in an industrial development bond in which interest rates reset each week based on the current market rate. Therefore, the Company does not believe that it has significant interest rate risk with respect to its interest bearing debt.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Form 10-K for the year ended December 31, 2023.
Current report — wording carried from elsewhere
exposure to interest rate fluctuations on the principal invested. The accompanying chart summarizes the maturities of the Company’s investments in debt securities at December 31, 2024.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
$29,403 and $25,344, respectively, and net earnings per share were $0.42 and $0.36, respectively, an increase of $0.06 per share or 16.7%.
Previous report — wording carried elsewhere
provided under the statute. Should the Company actually withdraw from the Plan at a future date, a withdrawal liability, which could be higher than the above discussed amounts, could be payable to the Plan.
Previous report — wording carried elsewhere
As further discussed in Note 1 of the Company’s Notes to Consolidated Financial Statements, the Company follows the revenue recognition guidance in ASC 606. ASC 606 requires adjustments for estimated customer cash discounts upon
Previous report — wording carried elsewhere
In order to address the impact of changes in input and other costs, the Company periodically reviews each item in its product portfolio to ascertain if price realization adjustments or other actions should be taken. These reviews include an evaluation of the risk factors relating to market place acceptance of such changes and their potential effect on future sales