TOOTSIE ROLL INDUSTRIES INC

Previous wording

Net product sales were $146,521 in first quarter 2025 compared to $151,464 in first quarter 2024, a decrease of $4,943 or 3.3%. Domestic (U.S.) net product sales in first quarter 2025 decreased 1.8% compared to the corresponding period in the prior year and foreign net product sales, including exports to foreign markets, decreased 16.3% compared to the corresponding period in the prior year. For the first quarter 2025, domestic sales represented 91.4% of total consolidated net product sales. The Company continued to face a challenging market in first quarter 2025 as customers and consumers have become more resistant to higher price realization. These headwinds have had some adverse effect on sales in first quarter 2025.

Current wording

Net product sales were $153,190 in second quarter 2025 compared to $148,819 in second quarter 2024, an increase of $4,371 or 2.9%. First half 2025 net product sales were $299,711 compared to $300,283 in first half 2024, a decrease of $572 or 0.2%. Domestic (U.S.) net product sales in second quarter and first half 2025 increased by 4.6% and 1.4% compared to the corresponding period in the prior year; and foreign net product sales, including exports to foreign markets and the effects of foreign translations, decreased 16.8% and 16.5%, respectively, compared to the corresponding period in the prior year. For the second quarter and first half 2025, domestic sales represented 93.8% and 92.6%, respectively, of total consolidated net product sales. Successful marketing and sales programs contributed to higher sales in second quarter 2025 compared to the prior year second quarter, however, the timing of sales, including seasonal sales, between second and third quarter 2025 did provide some additional benefit to second quarter 2025 when compared to second quarter 2024. The Company continued to face a challenging market in second quarter and first half 2025 as customers and consumers have become more resistant to higher price realization.

Previous wording

Product cost of goods sold was $95,500 in first quarter 2025 compared to $102,732 in first quarter 2024. Product cost of goods sold includes $(155) and $365 of certain deferred compensation (credits) expenses in first quarter 2025 and 2024, respectively. These deferred compensation (credits) expenses principally resulted from the 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. Excluding the adjustment for deferred compensation (credits) expenses, product cost of goods sold decreased from $102,367 in first quarter 2024 to $95,655 in first quarter 2025, a decrease of $6,712 or 6.6%. As a percentage of net product sales, adjusted product cost of goods sold was 65.3% and 67.6% in first quarter 2025 and 2024, respectively, a favorable decrease of 2.3 percentage points. First quarter 2025 product cost of goods sold and gross profit margins benefited from higher price realization, improvements in plant manufacturing operating efficiencies, and certain cost reductions.

Current wording

Product cost of goods sold was $98,127 in second quarter 2025 compared to $99,732 in second quarter 2024, and $193,627 in first half 2025 compared to $202,464 in first half 2024. Product cost of goods sold includes $467 and $122 of certain deferred compensation expenses in second quarter 2025 and 2024, respectively, and $312 and $487 of certain deferred compensation expenses in first half 2025 and 2024, respectively. These deferred compensation expenses principally resulted from the 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. Excluding the adjustment for deferred compensation expenses, product cost of goods sold decreased from $99,610 in second quarter 2024 to $97,660 in second quarter 2025, a decrease of $1,950 or 2.0%; and from $201,977 in first half 2024 to $193,315 in first half 2025, a decrease of $8,662 or 4.3%. As a percentage of net product sales, adjusted product cost of goods sold was 63.8% and 66.9% in second quarter 2025 and 2024, respectively, a decrease of 3.1 percentage points; and 64.5% and 67.3% in first half 2025 and 2024, respectively, a decrease of 2.8 percentage points. Second quarter and first half 2025 product cost of goods sold and gross profit margins benefited from higher price realization implemented to restore margins, improvements in plant manufacturing operating efficiencies, and certain cost reductions.

Previous 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 these periods with the objective of improving sales price realization in order to recover our margin declines. Although we made progress in restoring our margins in first quarter 2025, cocoa and chocolate markets continue at significantly elevated levels compared to historical prices in past years. As a result, we expect to incur even higher cocoa and chocolate costs during the balance of 2025 and into 2026 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.

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 these periods with the objective of improving sales price realization in order to recover our margin declines. Although we made progress in restoring our margins in second quarter and first half 2025, prices of cocoa and chocolate continue at significantly elevated levels compared to historical prices in past years. As a result, we expect to incur even higher cocoa and chocolate unit costs during the balance of 2025 and into 2026 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

The Company uses the Last-In-First-Out (LIFO) method of accounting for inventory and costs of goods sold which generally results in lower current net earnings during such periods of increasing costs and higher inflation. As a result, the above-discussed higher cocoa and chocolate costs will have an increasingly adverse effect on our gross profit margins as this year progresses. 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 to the final consumers of our products.

Current wording

The Company uses the Last-In-First-Out (LIFO) method of accounting for inventory and costs of goods sold which generally results in lower current net earnings during such periods of increasing costs and higher inflation. As a result, the above-discussed higher cocoa and chocolate costs will have an increasingly adverse effect on our gross profit margins as this year progresses.

Previous wording

Selling, marketing and administrative expenses were $29,390 in first quarter 2025 compared to $38,918 in first quarter 2024. Selling, marketing and administrative expenses include $(3,459) and $6,925 of certain deferred compensation (credits) expenses in first quarter 2025 and 2024, respectively. As discussed above, these 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. Excluding the adjustment for deferred compensation (credits) expenses, selling, marketing and administrative expenses increased from $31,993 in first quarter 2024 to $32,849 in first quarter 2025, an increase of $856 or 2.7%. As a percentage of net product sales, adjusted selling, marketing and administrative expenses increased from 21.1% in first quarter 2024 to 22.4% in first quarter 2025, an unfavorable increase of 1.3 percentage points. These higher expenses as a percentage of sales reflect the adverse effects of lower sales as certain expenses are generally fixed and do not change significantly with changes in sales.

Current wording

2024, respectively. As discussed above, these 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. Excluding the adjustment for deferred compensation expenses, selling, marketing and administrative expenses increased from $32,670 in second quarter 2024 to $33,959 in second quarter 2025, an increase of $1,289 or 3.9%; and from $64,663 in first half 2024 to $66,808 in first half 2025, an increase of $2,145 or 3.3%. As a percentage of net product sales, adjusted selling, marketing and administrative expenses increased from 22.0% in second quarter 2024 to 22.2% in second quarter 2025, an unfavorable change of 0.2 percentage points; and from 21.5% in first half 2024 to 22.3% in first half 2025, an unfavorable change of 0.8 percentage points. These higher expenses as a percentage of sales reflect the adverse effects of lower sales as many of our selling, marketing and administrative expenses are fixed and do not change significantly with changes in sales.

Previous wording

Selling, marketing and administrative expenses include $13,916 and $13,616 for customer freight, delivery and warehousing expenses in first quarter 2025 and 2024, respectively, an increase of $300 or 2.2%. These expenses were 9.5% and 9.0% of net product sales in first quarter 2025 and 2024, respectively. Customer freight and delivery unit costs, including the cost per pound shipped, was less favorable in first quarter 2025 compared to the corresponding period in 2024.

Current wording

Selling, marketing and administrative expenses include $13,047 and $13,839 for customer freight, delivery and warehousing expenses in second quarter 2025 and 2024, respectively, a decrease of $792 or 5.7%; and $26,963 and $27,455 in first half 2025 and 2024, respectively, a decrease of $492 or 1.8%. These expenses were 8.5% and 9.3% of net product sales in second quarter 2025 and 2024, respectively; and 9.0% and 9.1% of net product sales in first half 2025 and 2024, respectively. Customer freight and delivery unit costs, including the cost per pound shipped, were favorable in second quarter 2025 compared to the corresponding period in 2024.

Previous wording

Earnings from operations were $23,060 in first quarter 2025 compared to $11,110 in first quarter 2024. Earnings from operations include $(3,614) and $7,290 of certain deferred compensation (credits) expenses in first quarter 2025 and 2024, respectively, which is discussed above. Adjusting for these deferred compensation (credits) expenses, earnings from operations were $19,446 and $18,400 in first quarter 2025 and 2024, respectively, an increase of $1,046 or 5.7%. As a percentage of net product sales, these adjusted operating earnings were 13.3% and 12.1% in first quarter 2025 and 2024, respectively, a favorable increase of 1.2 percentage points. Higher price realization and resulting improvement in gross profit margins offset the adverse effects of lower sales volumes relating to first quarter 2025 adjusted operating earnings.

Current wording

Earnings from operations were $12,121 in second quarter 2025 compared to $15,435 in second quarter 2024; and were $35,181 in first half 2025 compared to $26,545 in first half 2024. Earnings from operations include $10,870 and $2,492 of certain deferred compensation expenses in second quarter 2025 and 2024, respectively; and include $7,256 and $9,782 of certain deferred compensation expenses in first half 2025 and 2024, respectively, which is discussed above. Adjusting for this deferred compensation expenses, adjusted earnings from operations were $22,991 and $17,927 in second quarter 2025 and 2024, respectively, an increase of $5,064 or 28.2%; and $42,437 and $36,327 in first half 2025 and 2024, respectively, an increase of $6,110 or 16.8%. As a percentage of net product sales, these adjusted operating earnings were 15.0% and 12.0% in second quarter 2025 and 2024, respectively, a favorable 3.0 percentage point change; and 14.2% and 12.1% in first half 2025 and 2024, respectively, a favorable 2.1 percentage point change. Improvements in gross profit margins, as discussed above, was the principal driver of these favorable changes in operating earnings in second quarter and first half 2025.

Previous wording

Other (loss) income, net was $(51) in first quarter 2025 compared to $9,032 in first quarter 2024. Other (loss) income, net for first quarter 2025 and 2024 includes net (losses) gains and investment income of $(3,614) and $7,290, respectively, on trading securities which provide an economic hedge of the Company’s deferred compensation liabilities on trading securities. The changes in net investment activity on trading securities in first quarter 2025 and 2024 reflect the overall changes in the equity markets during these periods. These changes were substantially offset by a like amount of deferred compensation expense included in product cost of goods sold and selling, marketing, and administrative expenses in the respective periods as discussed above.

Current wording

Other income, net was $14,072 in second quarter 2025 compared to $4,900 in second quarter 2024; and $14,021 in first half 2025 compared to $13,932 in first half 2024. Other income, net includes net gains and investment income of $10,870 and $2,492 for second quarter 2025 and 2024, respectively, and $7,256 and $9,782 in first half 2025 and 2024, respectively, on trading securities which provide an economic hedge of the Company’s deferred compensation liabilities on trading securities. The changes in net investment activity on trading securities in second quarter and first half 2025 and 2024 reflect the overall changes in the equity markets during these periods. These changes were substantially offset by a like amount of deferred compensation expense included in product cost of goods sold and selling, marketing, and administrative expenses in the respective periods as discussed above.

Previous wording

Other (loss) income, net for first quarter 2025 and 2024 includes investment income from available for sale securities and cash equivalents of $3,461 and $1,862 in 2025 and 2024, respectively. The aforementioned increases in 2025 investment income reflects the higher interest rate environment in 2025, including the maturities of prior investments at lower yields, as well as higher average balances held in first quarter 2025 compared to the corresponding period in the prior year. Other (loss) income, net also includes an insurance recovery of $0.8 in first quarter 2025 and pre-tax losses on foreign exchange of $(544) and $(20) in first quarter 2025 and 2024, respectively.

Current wording

the maturities of prior investments at lower yields, as well as higher average balances held in second quarter and first half 2025 compared to the corresponding period in the prior year. Other income, net also includes an insurance recovery of $479 in second quarter 2025 and $1,307 in first half 2025. In addition, other income, net also includes pre-tax gain (loss) on foreign exchange of $(843) and $140 in second quarter 2025 and 2024, respectively; and $(1,387) and $120 in first half 2025 and 2024, respectively.

Previous wording

Net earnings attributable to Tootsie Roll Industries, Inc. were $18,058 (after $17 net loss attributed to non-controlling interests) in first quarter 2025 compared to $15,834 (after $1 net income attributed to non-controlling interests) in first quarter 2024, and earnings per share were $0.25 and $0.22 in first quarter 2025 and 2024, respectively, an increase of $0.03 per share, or 13.6%. Earnings per share attributable to Tootsie Roll Industries, Inc. for first quarter 2025 benefited from the reduction in average shares outstanding resulting from purchases in the open market by the Company of its common stock during the preceding twelve months. Average shares outstanding decreased from 73,536 at first quarter 2024 to 72,957 at first quarter 2025.

Current wording

Net earnings attributable to Tootsie Roll Industries, Inc. were $17,544 (after $14 net loss attributed to non-controlling interests) in second quarter 2025 compared to $15,640 (after $6 net loss attributed to non-controlling interests) in second quarter 2024, and earnings per share were $0.24 and $0.21 in second quarter 2025 and 2024, respectively, an increase of $0.03 per share, or 14.3%. First half 2025 net earnings attributable to Tootsie Roll Industries, Inc. were $35,602 (after $31 net loss attributed to non-controlling interests) compared to first half 2024 net earnings of $31,474 (after $5 net loss attributed to non-controlling interests), and net earnings per share were $0.49 and $0.43 in first half 2025 and first half 2024, respectively, an increase of $0.06 per share or 14.0%. Earnings per share attributable to Tootsie Roll Industries, Inc. for second quarter and first half 2025 benefited from the reduction in average shares outstanding resulting from purchases in the open market by the Company of its common stock during the preceding twelve months. Average shares outstanding decreased from 73,536 at second quarter 2024 to 72,879 at second quarter 2025, and from 73,536 in first half 2024 to 72,923 in first half 2025.

Previous wording

Goodwill and intangibles, principally trademarks, are assessed annually as of December 31 or whenever events or circumstances indicate that the carrying values may not be recoverable from future cash flows. The Company has not identified any triggering events, as defined, or other adverse information that would indicate a material impairment of its goodwill or intangibles in first quarter 2025. Although Management has not identified any trigging events at this time relating to its intangibles, factors outlined in the Company’s risk factors discussed on Form 10-K for the year ended December 31, 2024, could change this assessment in the future.

Current wording

Goodwill and intangibles, principally trademarks, are assessed annually as of December 31 or whenever events or circumstances indicate that the carrying values may not be recoverable from future cash flows. The Company has not identified any triggering events, as defined, or other adverse information that would indicate a material impairment of its goodwill or intangibles in second quarter or first half 2025. Although Management has not identified any trigging events at this time relating to its intangibles, factors outlined in the Company’s risk factors discussed on Form 10-K for the year ended December 31, 2024, could change this assessment in the future.

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 in 2012. Beginning in 2015, the Plan was reclassified to “critical and declining status”, as defined by the PPA and PBGC, for the plan year beginning January 1, 2015. A designation of “critical and declining status” implies that the Plan is expected to become insolvent in the next 20 years. 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. In June 2024, the PBGC announced that it has approved the Plan’s application for Special Financial Assistance under the American Rescue Plan Act of 2021. The Plan was granted approximately $3.4 billion in Special Financial Assistance funds and received those funds in July 2024. As a result of the Special Financial Assistance the plan status changed to “critical status” for 2024 and will be until the plan year ending in 2051.

Current 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 in 2012. In 2015, the Plan was reclassified to “critical and declining status”, as defined by the PPA and PBGC, for the plan year beginning January 1, 2015. A designation of “critical and declining status” implies that the Plan is expected to become insolvent in the next 20 years. 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. In June 2024, the PBGC announced that it has approved the Plan’s application for Special Financial Assistance under the American Rescue Plan Act of 2021. The Plan was granted approximately $3.4 billion in Special Financial Assistance funds and received those funds in July 2024. As a result of the Special Financial Assistance, the plan status changed to “critical status” for 2024 and will be until the plan year ending in 2051.

Previous wording

The Company’s pension expense for this Plan for first quarter 2025 and 2024 was $698 and $704, respectively. This expense includes surcharges of $246 and $248 for first quarter 2025 and 2024, respectively, as required under the amended plan of rehabilitation. The Company’s twelve months pension expense for this Plan for 2024 and 2023 was $3,332 and $3,516, respectively, which includes surcharges of $1,174 and $1,239, respectively.

Current wording

The Company’s pension expense for this Plan for first half 2025 and 2024 was $1,744 and $1,770, respectively. The aforementioned expense includes surcharges of $615 and $624 for first half 2025 and 2024, respectively, as required under the amended plan of rehabilitation. The Company’s twelve months pension expense for this Plan for 2024 and 2023 was $3,332 and $3,516 respectively, which includes surcharges of $1,174 and $1,239, respectively.

Previous wording

Our operations and sales are principally in North America, and our cross border transactions with Canada and Mexico qualify under the USMCA free-trade agreement. Certain ingredients, including cocoa, chocolate, and edible oils, as well as some packaging and other purchases, do have foreign origins outside of USMCA. Until such time that more clarity regarding tariffs, as well as possible retaliatory tariffs, is forthcoming, we are not able to ascertain the effects of more permanent tariffs on our business. Nonetheless, the Company has recently performed an internal analysis of the effects of the current temporary tariffs (in effect during this 90 day “pause” period) which affect certain foreign sourced ingredients and packaging materials and supplies. Based on this analysis, Management

Current wording

Our operations and sales are principally in North America, and our cross-border transactions with Canada and Mexico qualify under the USMCA free-trade agreement. Certain ingredients, including cocoa, chocolate, and edible oils, as well as some packaging and other purchases, do have foreign origins outside of USMCA. Until such time that more clarity regarding tariffs, as well as possible retaliatory tariffs, is forthcoming, we are not able to ascertain the effects of more permanent tariffs on our business. Nonetheless, the Company has recently performed an internal analysis of the effects of the current tariffs, some of which are temporary, reciprocal, “base-line” or minimum 10% tariffs, that affect certain foreign sourced ingredients, packaging materials and supplies. Based on this analysis, Management believes that current tariffs are estimated to have approximately $6,800 of adverse annual (12 months) effects on our consolidated earnings from operations. When the permanent tariffs are finally determined, should they be above or below the current tariff rates, our estimated annual increase in tariff costs should be adjusted accordingly. There has been some discussion in the Trump administration that ingredients that cannot be sourced in the USA (e.g. cocoa) may be exempt from future tariffs. In addition, the Company does purchase manufacturing equipment from foreign sources, principally the European Union, and therefore, such purchases will become more costly due to new tariffs being imposed.

Previous wording

Net cash flows provided by operating activities were $3,602 and $21,401 in first quarter 2025 and 2024, respectively, an unfavorable decrease of $17,799. The decrease in cash flows from operating activities principally reflects changes in working capital primarily relating to accounts receivables and inventory during the comparative periods. The change in accounts receivable reflects lower sales in first quarter 2025 as well as timing of sales and collections in the comparative periods. The change in inventories reflect changes in the Company’s production plan in 2025 as compared to the prior year corresponding period.

Current wording

Net cash flows (used in) provided by operating activities were $(4,935) and $8,777 in first half 2025 and 2024, respectively, an unfavorable decrease of $13,712. The decrease in cash flows from operating activities principally reflects changes in working capital, primarily relating to accounts receivables and inventory, during the comparative periods. The change in accounts receivable reflects the timing of sales and collections in the comparative periods. The change in inventories reflect changes in the Company’s production plan in 2025 as compared to the prior year corresponding period.

Previous wording

Cash flows used in investing activities reflect $13,110 and $27,297 of purchases of available for sale securities during first quarter 2025 and 2024, respectively, and $11,727 and $12,655 of sales and maturities of available for sale securities during first quarter 2025 and 2024, respectively. First quarter 2025 and 2024 investing activities also include capital expenditures of $2,852 and $4,494, respectively. The Company is currently pursuing a plant expansion, including additions to and replacement of certain processing and packaging lines, to better meet higher level of forecasted demand for certain products on a timelier and more cost effective basis. The plant expansion is expected to take place over the next seven years with most of the expenditures expected to occur during 2025 through 2027. The total cost of this expansion will approximate $95,000 to $100,000, which includes estimated normal and recurring capital expenditures at this plant location, and is expected to be funded from the Company’s cash flow from operations and internal sources.

Current wording

Cash flows provided by (used in) investing activities were $5,670 and $(25,918) in first half 2025 and 2024, respectively, a favorable increase of $31,588. The increase in cash flows from investing activities principally reflects a decline in purchases of available for sale securities, and a corresponding increase in cash and cash equivalents during the comparative periods. First half 2025 and 2024 investing activities also include capital expenditures of $10,363 and $8,421, respectively. The Company is currently pursuing a plant expansion, including additions to and replacement of certain processing and packaging lines, to better meet higher level of forecasted demand for certain products on a timelier and more cost-effective basis. The plant expansion is expected to take place over the next five years with most of the capital expenditures expected to occur during 2026 through 2027. The total cost of this expansion will approximate $95,000 to $100,000, which includes estimated normal and recurring capital expenditures at this plant location, and is expected to be funded from the Company’s cash flow from operations and internal sources.

Previous wording

The Company’s condensed consolidated financial statements include bank borrowings of $975 and $1,050 at March 31, 2025 and 2024, respectively, all of which relate to its Spanish subsidiary. The Company had no other outstanding bank borrowings at March 31, 2025 and 2024.

Current wording

The Company’s condensed consolidated financial statements include bank borrowings of $1,018 and $1,046 at June 30, 2025 and 2024, respectively, all of which relate to its Spanish subsidiary. The Company had no other outstanding bank borrowings at June 30, 2025 and 2024.

Previous wording

Financing activities include Company common stock purchases and retirements of $6,483 and $0 in first quarter 2025 and 2024, respectively. Cash dividends of $12,781 and $12,491 were paid in first quarter 2025 and 2024, respectively.

Current wording

Financing activities include Company common stock purchases and retirements of $6,483 and $0 in first half 2025 and 2024, respectively. Cash dividends of $12,928 and $12,634 were paid in first half 2025 and 2024, respectively.

Previous wording

The Company’s current ratio (current assets divided by current liabilities) was 4.2 to 1 at March 31, 2025 compared to 3.8 to 1 at December 31, 2024 and 3.8 to 1 at March 31, 2024. Net working capital was $250,938 at March 31, 2025 compared to $246,319 and $241,272 at December 31, 2024 and March 31, 2024, respectively. Included in net working capital is cash and cash equivalents and short-term investments totaling $176,607 at March 31, 2025 compared to $194,630 and $159,361 at December 31, 2024 and March 31, 2024, respectively. In addition, long term investments, principally debt securities comprising corporate bonds, were $330,949 at March 31, 2025, as compared to $332,338 and $278,953 at December 31, 2024 and March 31, 2024, respectively. Aggregate cash and cash equivalents and short and long-term investments were $507,556, $526,968, and $438,314, at March 31, 2025, December 31, 2024 and March 31, 2024, respectively, including $100,892, $105,067, and $95,957 at March 31, 2025, December 31, 2024 and March 31, 2024, respectively, relating to trading securities which are used as an economic hedge for the Company’s deferred compensation liabilities.

Current wording

The Company’s current ratio (current assets divided by current liabilities) was 4.0 to 1 at June 30, 2025 compared to 3.8 to 1 at December 31, 2024 and 3.7 to 1 at June 30, 2024. Net working capital was $273,269 at June 30, 2025 compared to $246,319 and $237,114 at December 31, 2024 and June 30, 2024, respectively. Included in net working capital is cash and cash equivalents and short-term investments totaling $170,531 at June 30, 2025 compared to $194,630 and $131,171 at December 31, 2024 and June 30, 2024, respectively. In addition, long term investments, principally debt securities comprising corporate bonds, were $333,626 at March 31, 2025, as compared to $332,338 and $292,723 at December 31, 2024 and June 30, 2024, respectively. Aggregate cash and cash equivalents and short and long-term investments were $504,157, $526,968, and $423,894, at June 30, 2025, December 31, 2024 and June 30, 2024, respectively, including $112,009, $105,067, and $98,728 at June 30, 2025, December 31, 2024 and June 30, 2024, respectively, relating to trading securities which are used as an economic hedge for the Company’s deferred compensation liabilities.

Previous wording

Investments in available for sale securities, primarily high quality corporate bonds that matured during first quarter 2025 and 2024, were generally used in working capital, capital expenditures or were replaced with debt securities of similar maturities. The net unrealized gain (loss) on available for sale investments was approximately $3,300 and $(2,200) at March 31, 2025 and 2024, respectively. The Company expects to hold most of these securities to maturity and therefore does not expect to ultimately realize a substantial portion of any of unrealized losses on

Current wording

Investments in available for sale securities, primarily high-quality corporate bonds, that matured during first half 2025 and 2024, were generally used in working capital, capital expenditures or were replaced with debt securities of similar maturities. The net unrealized gain (loss) on available for sale investments was approximately $4,600 and $(1,600) at June 30, 2025 and 2024, respectively. The Company expects to hold most of these securities to maturity and therefore does not expect to ultimately realize a substantial portion of any of unrealized losses on individual investments (see also Item 3 below, QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK).

Previous wording

The Company periodically contributes to a VEBA trust, managed and controlled by the Company, to fund the estimated future costs of certain employee health, welfare and other benefits. The Company funded $20,000 to the VEBA trust in 2023. No contribution was made during first quarter. The Company has and will continue to use these VEBA funds to pay the actual cost of such benefits through part or all of 2027. The VEBA trust held $14,090, $13,926 and $19,258 of aggregate cash and cash equivalents at March 31, 2025, December 31, 2024 and March 31, 2024, respectively. This asset value is included in prepaid expenses and long-term other assets in the Company’s Condensed Consolidated Statement of Financial Position. These assets primarily comprise cash and corporate bonds and are categorized as Level 1 and Level 2 within the fair value hierarchy.

Current wording

The Company periodically contributes to a VEBA trust, managed and controlled by the Company, to fund the estimated future costs of certain employee health, welfare and other benefits. The Company funded $20,000 to the VEBA trust in 2023. No contribution was made during first half 2025. The Company has and will continue to use these VEBA funds to pay the actual cost of such benefits through part or all of 2027. The VEBA trust held $12,509, $13,926 and $19,436 of aggregate cash and cash equivalents at June 30, 2025, December 31, 2024 and June 30, 2024, respectively. This asset value is included in prepaid expenses and long-term other assets in the Company’s Condensed Consolidated Statement of Financial Position. These assets primarily comprise cash and corporate bonds and are categorized as Level 1 and Level 2 within the fair value hierarchy.