Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 15, 2018 | Jun. 30, 2017 | |
Entity Registrant Name | TOOTSIE ROLL INDUSTRIES INC | ||
Entity Central Index Key | 98,677 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 604,596,000 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Common Stock | |||
Entity Common Stock, Shares Outstanding | 37,701,872 | ||
Class B Common Stock | |||
Entity Common Stock, Shares Outstanding | 24,891,136 |
CONSOLIDATED STATEMENTS OF Earn
CONSOLIDATED STATEMENTS OF Earnings and Retained Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF Earnings and Retained Earnings | |||
Net product sales | $ 515,674 | $ 517,373 | $ 536,692 |
Rental and royalty revenue | 3,615 | 3,727 | 3,420 |
Total revenue | 519,289 | 521,100 | 540,112 |
Product cost of goods sold | 325,924 | 320,290 | 340,090 |
Rental and royalty cost | 972 | 1,019 | 889 |
Total costs | 326,896 | 321,309 | 340,979 |
Product gross margin | 189,750 | 197,083 | 196,602 |
Rental and royalty gross margin | 2,643 | 2,708 | 2,531 |
Total gross margin | 192,393 | 199,791 | 199,133 |
Selling, marketing and administrative expenses | 120,977 | 107,377 | 108,051 |
Earnings from operations | 71,416 | 92,414 | 91,082 |
Other income, net | 13,145 | 5,498 | 1,496 |
Earnings before income taxes | 84,561 | 97,912 | 92,578 |
Provision for income taxes | 3,907 | 30,593 | 26,451 |
Net earnings | 80,654 | 67,319 | 66,127 |
Less: Net earnings (loss) attributable to noncontrolling interests | (210) | (191) | 38 |
Net earnings attributable to Tootsie Roll Industries, Inc. | $ 80,864 | $ 67,510 | $ 66,089 |
Net earnings attributable to Tootsie Roll Industries, Inc. per share (in dollars per share) | $ 1.28 | $ 1.05 | $ 1.02 |
Average number of shares outstanding (in shares) | 63,179 | 64,086 | 65,103 |
Retained earnings at beginning of period | $ 43,833 | $ 52,349 | $ 64,927 |
Net earnings attributable to Tootsie Roll Industries, Inc. | 80,864 | 67,510 | 66,089 |
Cash dividends | (22,548) | (22,209) | (21,308) |
Stock dividends | (44,924) | (53,817) | (57,359) |
Retained earnings at end of period | $ 57,225 | $ 43,833 | $ 52,349 |
CONSOLIDATED STATEMENTS OF Comp
CONSOLIDATED STATEMENTS OF Comprehensive Earnings - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF Comprehensive Earnings | |||
Net earnings | $ 80,654 | $ 67,319 | $ 66,127 |
Other comprehensive income (loss), before tax: | |||
Foreign currency translation adjustments | 1,198 | (3,816) | (4,145) |
Pension and postretirement reclassification adjustment: | |||
Unrealized gains (losses) for the period on postretirement and pension benefits | (1,009) | (688) | 1,446 |
Less: reclassification adjustment for (gains) losses to net earnings | (1,462) | (1,642) | (1,451) |
Unrealized gains (losses) on postretirement and pension benefits | (2,471) | (2,330) | (5) |
Investments: | |||
Unrealized gains (losses) for the period on investments | (300) | (151) | (428) |
Less: reclassification adjustment for (gains) losses to net earnings | 5 | ||
Unrealized gains (losses) on investments | (300) | (146) | (428) |
Derivatives: | |||
Unrealized gains (losses) for the period on derivatives | (1,410) | 2,832 | (3,814) |
Less: reclassification adjustment for (gains) losses to net earnings | (107) | 1,150 | 4,133 |
Unrealized gains (losses) on derivatives | (1,517) | 3,982 | 319 |
Total other comprehensive income (loss), before tax | (3,090) | (2,310) | (4,259) |
Income tax benefit (expense) related to items of other comprehensive income | 1,545 | (572) | (7) |
Total comprehensive earnings | 79,109 | 64,437 | 61,861 |
Comprehensive earnings (loss) attributable to noncontrolling interests | (210) | (191) | 38 |
Total comprehensive earnings attributable to Tootsie Roll Industries, Inc. | $ 79,319 | $ 64,628 | $ 61,823 |
CONSOLIDATED STATEMENTS OF Fina
CONSOLIDATED STATEMENTS OF Financial Position - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash & cash equivalents | $ 96,314 | $ 119,145 |
Restricted cash | 406 | 382 |
Investments | 41,606 | 67,513 |
Accounts receivable trade, less allowances of $1,921 and $1,884 | 47,354 | 42,964 |
Other receivables | 5,425 | 3,299 |
Inventories: | ||
Finished goods & work-in-process | 31,922 | 34,631 |
Raw material & supplies | 22,905 | 22,900 |
Income taxes receivable | 12,974 | 1,444 |
Prepaid expenses | 12,014 | 5,702 |
Deferred income taxes | 1,320 | |
Total current assets | 270,920 | 299,300 |
PROPERTY, PLANT & EQUIPMENT, at cost: | ||
Land | 21,962 | 22,081 |
Buildings | 118,491 | 116,398 |
Machinery & equipment | 381,665 | 369,802 |
Construction in progress | 4,866 | 3,546 |
Property, plant and equipment, gross | 526,984 | 511,827 |
Less-accumulated depreciation | 348,012 | 330,922 |
Net property, plant and equipment | 178,972 | 180,905 |
OTHER ASSETS: | ||
Goodwill | 73,237 | 73,237 |
Trademarks | 175,024 | 175,024 |
Investments | 190,510 | 164,665 |
Split dollar officer life insurance | 26,042 | 26,042 |
Prepaid expenses and other | 15,817 | 602 |
Deferred income taxes | 424 | 326 |
Total other assets | 481,054 | 439,896 |
Total assets | 930,946 | 920,101 |
CURRENT LIABILITIES: | ||
Accounts payable | 11,928 | 10,320 |
Bank loan | 440 | 336 |
Dividends payable | 5,660 | 5,573 |
Accrued liabilities | 45,157 | 46,300 |
Postretirement health care | 603 | 513 |
Deferred income taxes | 519 | |
Total current liabilities | 63,788 | 63,561 |
NONCURRENT LIABILITIES: | ||
Deferred income taxes | 41,457 | 46,060 |
Bank loans | 230 | |
Postretirement health care | 12,894 | 11,615 |
Industrial development bonds | 7,500 | 7,500 |
Liability for uncertain tax positions | 4,817 | 5,185 |
Deferred compensation and other liabilities | 66,686 | 74,412 |
Total noncurrent liabilities | 133,354 | 145,002 |
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | ||
Capital in excess of par value | 656,752 | 646,768 |
Retained earnings | 57,225 | 43,833 |
Accumulated other comprehensive loss | (21,791) | (20,246) |
Treasury stock (at cost)- 85 & 83 shares, respectively | (1,992) | (1,992) |
Total Tootsie Roll Industries, Inc. shareholders' equity | 733,840 | 711,364 |
Noncontrolling interests | (36) | 174 |
Total equity | 733,804 | 711,538 |
Total liabilities and shareholders' equity | 930,946 | 920,101 |
Common Stock | ||
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | ||
Common stock, $.69-4/9 par value— 120,000 shares authorized— 37,960 and 37,701, respectively, issued. Class B common stock, $.69-4/9 par value— 40,000 shares authorized— 24,891 and 24,221, respectively, issued | 26,361 | 26,181 |
Class B Common Stock | ||
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | ||
Common stock, $.69-4/9 par value— 120,000 shares authorized— 37,960 and 37,701, respectively, issued. Class B common stock, $.69-4/9 par value— 40,000 shares authorized— 24,891 and 24,221, respectively, issued | $ 17,285 | $ 16,820 |
CONSOLIDATED STATEMENTS OF Fin5
CONSOLIDATED STATEMENTS OF Financial Position (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Trade accounts receivable, allowances | $ 1,921 | $ 1,884 |
Treasury stock, shares | 85 | 83 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.6944 | $ 0.6944 |
Common stock, shares authorized | 120,000 | 120,000 |
Common stock, shares issued | 37,960 | 37,701 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.6944 | $ 0.6944 |
Common stock, shares authorized | 40,000 | 40,000 |
Common stock, shares issued | 24,891 | 24,221 |
CONSOLIDATED STATEMENTS OF Cash
CONSOLIDATED STATEMENTS OF Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net earnings | $ 80,654 | $ 67,319 | $ 66,127 |
Adjustments to reconcile net earnings to net cash used in operating activities: | |||
Depreciation and amortization | 18,991 | 19,627 | 20,388 |
Deferred income taxes | (2,337) | 199 | 255 |
Impairment of majority-owned Spanish subsidiaries | 2,371 | ||
Amortization of marketable security premiums | 2,386 | 2,830 | 3,105 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (4,012) | 6,869 | (8,929) |
Other receivables | (3,146) | 473 | 1,119 |
Inventories | 1,558 | 4,183 | 7,530 |
Prepaid expenses and other assets | (22,052) | 2,999 | 11,593 |
Accounts payable and accrued liabilities | (557) | (2,061) | 3,839 |
Income taxes payable | (11,899) | (5,797) | (115) |
Postretirement health care benefits | (1,192) | (1,216) | (903) |
Deferred compensation and other liabilities | (17,792) | 3,125 | (12,936) |
Net cash from operating activities | 42,973 | 98,550 | 91,073 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Change in restricted cash | (23) | 1,149 | |
Capital expenditures | (16,673) | (16,090) | (15,534) |
Purchases of trading securities | (5,089) | (4,569) | (4,095) |
Sales of trading securities | 22,396 | 1,433 | 16,644 |
Purchase of available for sale securities | (89,364) | (81,835) | (61,951) |
Sale and maturity of available for sale securities | 79,410 | 49,177 | 55,264 |
Net cash used in investing activities | (9,343) | (51,884) | (8,523) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Shares purchased and retired | (34,133) | (29,093) | (33,004) |
Dividends paid in cash | (22,621) | (22,266) | (20,775) |
Proceeds from bank loans | 2,162 | 2,760 | |
Repayment of bank loans | (2,289) | (2,788) | (133) |
Net cash used in financing activities | (56,881) | (51,387) | (53,912) |
Effect of exchange rate changes on cash | 420 | (2,279) | (2,601) |
Increase (decrease) in cash and cash equivalents | (22,831) | (7,000) | 26,037 |
Cash and cash equivalents at beginning of year | 119,145 | 126,145 | 100,108 |
Cash and cash equivalents at end of year | 96,314 | 119,145 | 126,145 |
Supplemental cash flow information: | |||
Income taxes paid | 18,854 | 36,365 | 24,940 |
Interest paid | 68 | 34 | 17 |
Stock dividend issued | $ 69,739 | $ 61,671 | $ 57,220 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | Notes to Consolidated Financial Statements ($ in thousands except per share data) TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES NOTE 1—SIGNIFICANT ACCOUNTING POLICIES: Basis of consolidation: The consolidated financial statements include the accounts of Tootsie Roll Industries, Inc. and its wholly-owned and majority-owned subsidiaries (the Company), which are primarily engaged in the manufacture and sales of candy products. Non-controlling interests relating to majority-owned subsidiaries are reflected in the consolidated financial statements and all significant intercompany transactions have been eliminated. Certain amounts previously reported have been reclassified to conform to the current year presentation. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue recognition: Products are sold to customers based on accepted purchase orders which include quantity, sales price and other relevant terms of sale. Revenue, net of applicable provisions for discounts, returns, allowances and certain advertising and promotional costs, including consumer coupons (price reduction), is recognized when products are delivered to customers and collectability is reasonably assured. Shipping and handling costs of $43,973, $40,629, and $42,619 in 2017, 2016 and 2015, respectively, are included in selling, marketing and administrative expenses. Accounts receivable are unsecured. Cash and cash equivalents: The Company considers temporary cash investments with an original maturity of three months or less to be cash equivalents. Investments: Investments consist of various marketable securities with maturities of generally up to three years, and variable rate demand notes with interest rates that are generally reset weekly and the security can be “put” back and sold weekly. The Company classifies debt and equity securities as either available for sale or trading. Available for sale securities are not actively traded by the Company and are carried at fair value. The Company follows current fair value measurement guidance and unrealized gains and losses on these securities are excluded from earnings and are reported as a separate component of shareholders’ equity, net of applicable taxes, until realized or other-than-temporarily impaired. Trading securities related to deferred compensation arrangements are carried at fair value with gains or losses included in other income, net. The Company invests in trading securities to economically hedge changes in its deferred compensation liabilities. The Company regularly reviews its investments to determine whether a decline in fair value below the cost basis is other-than-temporary. If the decline in fair value is judged to be other-than-temporary, the cost basis of the security is written down to fair value and the amount of the write-down is included in other income, net. Further information regarding the fair value of the Company’s investments is included in Note 10 of the Company’s Notes to Consolidated Financial Statements. Derivative instruments and hedging activities: Authoritative guidance requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of derivative instruments and related gains and losses, and disclosures about credit-risk-related contingent features in derivative agreements. From time to time, the Company enters into commodity futures, commodity options contracts and foreign currency forward contracts. Commodity futures and options are intended and are effective as hedges of market price risks associated with the anticipated purchase of certain raw materials (primarily sugar). Foreign currency forward contracts are intended and are effective as hedges of the Company’s exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of products manufactured in Canada and sold in the United States, and periodic equipment purchases from foreign suppliers denominated in a foreign currency. The Company does not engage in trading or other speculative use of derivative instruments. Further information regarding derivative instruments and hedging activities is included in Note 11 of the Company’s Notes to Consolidated Financial Statements. Inventories: Inventories are stated at cost, not to exceed market. The cost of substantially all of the Company’s inventories ($51,694 and $53,278 at December 31, 2017 and 2016, respectively) has been determined by the last-in, first-out (LIFO) method. The excess of current cost over LIFO cost of inventories approximates $18,825 and $17,574 at December 31, 2017 and 2016, respectively. The cost of certain foreign inventories ($4,423 and $4,253 at December 31, 2017 and 2016, respectively) has been determined by the first-in, first-out (FIFO) method. Rebates, discounts and other cash consideration received from vendors related to inventory purchases is reflected as a reduction in the cost of the related inventory item, and is, therefore, reflected in cost of sales when the related inventory item is sold. Property, plant and equipment: Depreciation is computed for financial reporting purposes by use of the straight-line method based on useful lives of 20 to 35 years for buildings and 5 to 20 years for machinery and equipment. Depreciation expense was $18,991, $19,627 and $20,388 in 2017, 2016 and 2015, respectively. Carrying value of long-lived assets: The Company reviews long-lived assets to determine if there are events or circumstances indicating that the amount of the asset reflected in the Company’s balance sheet may not be recoverable. When such indicators are present, the Company compares the carrying value of the long-lived asset, or asset group, to the future undiscounted cash flows of the underlying assets to determine if impairment exists. If applicable, an impairment charge would be recorded to write down the carrying value to its fair value. The determination of fair value involves the use of estimates of future cash flows that involve considerable management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance, and economic conditions. In fourth quarter 2017, the Company recorded a charge of $2,371 relating to the impairment of assets of a foreign subsidiary which is included in selling, marketing and administrative expense. No impairment charges of long-lived assets were recorded by the Company during 2016 and 2015. Postretirement health care benefits: The Company provides certain postretirement health care benefits to a group of “grandfathered” corporate office and management employees. The cost of these postretirement benefits is accrued during the employees’ working careers. See Note 7 of the Company’s Notes to Consolidated Financial Statements for additional information. The Company also provides split dollar life benefits to certain executive officers. The Company records an asset equal to the cumulative insurance premiums paid that will be recovered upon the death of covered employees or earlier under the terms of the plan. No premiums were paid in 2017, 2016 and 2015. Certain split dollar agreements were terminated during 2015 which resulted in the full repayment to the Company of all of the cumulative premiums previously paid on these policies. No split dollar agreements were terminated during 2016 or 2017. During 2015, the Company received $7,591 of such repayments which was recorded as a reduction in the carrying value of Split Dollar Officer Life Insurance. Goodwill and indefinite-lived intangible assets: In accordance with authoritative guidance, goodwill and intangible assets with indefinite lives are not amortized, but rather reviewed and tested for impairment at least annually unless certain interim triggering events or circumstances require more frequent testing. All trademarks have been assessed by management to have indefinite lives because they are expected to generate cash flows indefinitely. Management believes that all assumptions used for the impairment review and testing are consistent with those utilized by market participants performing similar valuations. No impairments of intangibles, including trademarks and goodwill, were recorded in 2017, 2016 or 2015. 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 the two step impairment testing process (quantitative analysis) as prescribed in the guidance. During fourth quarter 2017, the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance. Impairment testing of certain trademarks where the “step-zero” analysis was not considered appropriate was performed in fourth quarter 2017 using discounted cash flows and estimated royalty rates. Income taxes: Deferred income taxes are recorded and recognized for future tax effects of temporary differences between financial and income tax reporting. The Company records valuation allowances in situations where the realization of deferred tax assets is not more-likely-than-not. Further information regarding U.S. tax reform and other income tax matters are included in Note 4 of the Company’s Notes to Consolidated Financial Statements. Foreign currency translation: The U.S. dollar is used as the functional currency where a substantial portion of the subsidiary’s business is indexed to the U.S. dollar or where its manufactured products are principally sold in the U.S. All other foreign subsidiaries use the local currency as their functional currency. Where the U.S. dollar is used as the functional currency, foreign currency remeasurements are recorded as a charge or credit to other income, net in the statement of earnings. Where the foreign local currency is used as the functional currency, translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss). Restricted cash: Restricted cash comprises certain cash deposits of the Company’s majority-owned Spanish subsidiaries with international banks that are pledged as collateral for letters of credit and bank borrowings. VEBA trust: The Company maintains 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 made a $20,024 contribution to the VEBA trust in fourth quarter 2017 but no contribution were made to the trust in 2016. The Company will be using the VEBA trust funds to pay the actual cost of such benefits through 2022. At December 31, 2017 and 2016, the VEBA trust held $19,713 and $3,027, respectively, of aggregate cash and cash equivalents. This asset value is included in prepaid expenses and long-term other assets in the Company’s Consolidated Statement of Financial Position. These assets are categorized as Level 1 within the fair value hierarchy. Bank loans: Bank loans comprise borrowings by the Company’s majority-owned Spanish subsidiaries which are held by international banks. Comprehensive earnings: Comprehensive earnings include net earnings, foreign currency translation adjustments and unrealized gains/losses on commodity and/or foreign currency hedging contracts, available for sale securities and certain postretirement benefit obligations. Earnings per share: A dual presentation of basic and diluted earnings per share is not required due to the lack of potentially dilutive securities under the Company’s simple capital structure. Therefore, all earnings per share amounts represent basic earnings per share. The Class B common stock has essentially the same rights as common stock, except that each share of Class B common stock has ten votes per share (compared to one vote per share of common stock), is not traded on any exchange, is restricted as to transfer and is convertible on a share-for-share basis, at any time and at no cost to the holders, into shares of common stock which are traded on the New York Stock Exchange. Use of estimates: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates are used when accounting for sales discounts, allowances and incentives, product liabilities, assets recorded at fair value, income taxes, depreciation, amortization, employee benefits, contingencies and intangible asset and liability valuations. Actual results may or may not differ from those estimates. Recent accounting pronouncements: In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company has substantially completed its evaluation of the new guidance, and based upon this evaluation, the Company does not believe that the adoption of this new guidance will have a material effect on its consolidated statements of earnings, but management is expecting to reduce certain accrued liabilities (and increase retained earnings) relating to variable consideration, as defined by the new guidance on its consolidated statement of financial position (balance sheet). The Company is adopting the new standard effective January 1, 2018 (first quarter 2018), on a “modified retrospective” basis. In January 2016, the FASB issued ASU 2016-01 which modifies certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. The Company does not expect this standard will have a significant impact on the Company’s consolidated financial statements upon adoption. In February 2016, the FASB issued ASU 2016-02 which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This ASU also provides clarifications surrounding the presentation of the effects of leases in the income statement and statement of cash flows. This guidance will be effective for the Company on January 1, 2019. The Company owns substantially all of its real and personal property and does not expect this standard will have a significant impact on the Company’s consolidated financial statements upon adoption. In April 2016, the FASB issued ASU 2016-10, which contains amendments to the new revenue recognition standard on identifying performance obligations and accounting for licenses of intellectual property. The amendments related to identifying performance obligations clarify when a promised good or service is separately identifiable and allows entities to disregard items that are immaterial in the context of a contract. The licensing implementation amendments clarify how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether revenue is recognized over time or at a point in time. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company does not have any significant licenses of intellectual property and does not expect this standard will have a significant impact on the Company’s consolidated financial statements upon adoption. In August 2016, the FASB issued ASU 2016-15, which includes amendments addressing eight specific cash flow issues with the objective of reducing the existing diversity in practice. The effective date of the amendments to the standard is for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not expect this standard will have a significant impact on the Company’s consolidated financial statements upon adoption. In March 2017, the FASB issued ASU 2017-07, which requires employers who offer defined benefit and postretirement benefit plans to report the service cost component in the same line item as other compensation costs arising from services rendered by employees during the reporting period. The other components of net benefit costs will be presented in the income statement separately from the service cost and outside of a subtotal of income from operations. In addition, only the service cost component may be eligible for capitalization where applicable. This guidance is effective for annual periods beginning after December 15, 2017. The Company does not expect this standard will have a significant impact on the Company’s consolidated financial statements upon adoption. In August 2017, the FASB issued ASU 2017-12, guidance that amends hedge accounting. Under the new guidance, more hedging strategies will be eligible for hedge accounting and the application of hedge accounting is simplified. The new guidance amends presentation and disclosure requirements, and how effectiveness is assessed. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, which allows for the reclassification of certain income tax effects related to the U.S. Tax Cuts and Jobs Act (Tax Reform Act) between “Accumulated other comprehensive income” and “Retained earnings.” This ASU relates to the requirement that adjustments to deferred tax liabilities and assets related to a change in tax laws or rates to be included in “Income from continuing operations”, even in situations where the related items were originally recognized in “Other comprehensive income” (rather than in “Earnings from operations”). The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this ASU is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax laws or rates were recognized. The Company is currently evaluating the new guidance to determine the impact it may have on the consolidated financial statements. Recently adopted pronouncements: In November 2015, the FASB issued ASU 2015-17 which simplifies the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be classified as non-current in a classified statement of financial position. This guidance was adopted on January 1, 2017 on a prospective basis. Prior period balances have not been adjusted. In January 2017, the FASB issued ASU No. 2017-04 which simplifies the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. A goodwill impairment is now the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU No. 2017-04 will be effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption was permitted for any impairment tests performed after January 1, 2017, and the Company early adopted this ASU effective in the fourth quarter of 2017. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | NOTE 2—ACCRUED LIABILITIES: Accrued liabilities are comprised of the following: December 31, 2017 2016 Compensation $ 10,107 $ 9,840 Other employee benefits 7,659 7,012 Taxes, other than income 3,210 3,004 Advertising and promotions 18,834 21,421 Other 5,347 5,023 $ 45,157 $ 46,300 |
INDUSTRIAL DEVELOPMENT BONDS
INDUSTRIAL DEVELOPMENT BONDS | 12 Months Ended |
Dec. 31, 2017 | |
INDUSTRIAL DEVELOPMENT BONDS | |
INDUSTRIAL DEVELOPMENT BONDS | NOTE 3—INDUSTRIAL DEVELOPMENT BONDS: Industrial development bonds are due in 2027. The average floating interest rate, which is reset weekly, was 1.0% and 0.5% in 2017 and 2016, respectively. See Note 10 of the Company’s Notes to Consolidated Financial Statements for fair value disclosures. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | NOTE 4—INCOME TAXES: On December 22, 2017, the President of the United States signed into law the U.S. Tax Cuts and Jobs Act (Tax Reform Act). The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a toll tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The Company is required to record the effects of a change in tax law in the period of enactment which is 2017. The provision for income tax and effective tax rate include a $20,318 favorable adjustment related to the remeasurement of its U.S. deferred tax assets and liabilities at the rate expected to be in effect when the temporary differences are realized or settled (remeasured at 21% versus 35%). The other key provision analyzed was the enactment of a one-time toll charge resulting from the mandatory deemed repatriation of undistributed foreign earnings and profits. There was no impact in 2017 from the deemed repatriation provision as the Company determined that there were no net undistributed foreign earnings and profits subject to the toll charge. The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company believes it has obtained and analyzed all reasonably available information necessary to record the effects of the change in tax law and considers its accounting for the effects of the 2017 Tax Reform Act to be provisional as of December 31, 2017. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional regulatory guidance that may be issued by the Internal Revenue Service, and actions the Company may take as a result of the Tax Reform Act. The domestic and foreign components of pretax income are as follows: 2017 2016 2015 Domestic $ 76,042 $ 87,016 $ 82,276 Foreign 8,519 10,896 10,302 $ 84,561 $ 97,912 $ 92,578 The provision for income taxes is comprised of the following: 2017 2016 2015 Current: Federal $ 6,019 $ 28,484 $ 26,259 Foreign — 86 (596) State 369 1,954 785 6,388 30,524 26,448 Deferred: Federal (7,191) (2,547) (1,189) Foreign 3,425 3,323 2,106 State 1,285 (707) (914) (2,481) 69 3 $ 3,907 $ 30,593 $ 26,451 Significant components of the Company’s net deferred tax liability at year end were as follows: December 31, 2017 2016 Deferred tax assets: Accrued customer promotions $ 1,583 $ 3,194 Deferred compensation 15,403 26,509 Postretirement benefits 3,352 4,732 Other accrued expenses 4,200 6,543 Foreign subsidiary tax loss carry forward 7,270 8,452 Tax credit carry forward 3,435 2,514 35,243 51,944 Valuation allowance (3,269) (2,317) Total deferred tax assets $ 31,974 $ 49,627 Deferred tax liabilities: Depreciation $ 18,791 $ 28,049 Deductible goodwill and trademarks 34,593 45,733 Accrued export company commissions 4,189 6,044 Employee benefit plans 4,662 928 Inventory reserves 2,147 3,529 Prepaid insurance 769 1,015 Other prepaid expenses 1,196 — Deferred foreign exchange gain 405 436 Unrealized capital gain 977 733 Deferred gain on sale of real estate 5,278 8,093 Total deferred tax liabilities $ 73,007 $ 94,560 Net deferred tax liability $ 41,033 $ 44,933 At December 31, 2017, the Company has benefits related to state tax credit carry-forwards expiring by year as follows: $104 in 2018, $853 in 2019, $674 in 2020 $609 in 2021, $220 in 2029, $222 in 2030, $234 in 2031 and $231 in 2032. The Company expects that these state credit carry-forwards will be utilized before their expiration. At December 31, 2017, the tax benefits of the Company’s Canadian subsidiary tax loss carry-forwards expiring by year are as follows: $3,075 in 2029 and $665 in 2031. The tax benefits of the Company’s Mexican subsidiary tax loss carry forwards expiring by year are as follows: $492 in 2036. At December 31, 2017, the Company also had $288 in foreign tax credit carry-forwards. The Company expects that these carry-forwards will be realized before their expiration. At December 31, 2017, the amounts of the Company’s Spanish subsidiary loss carry-forwards expiring by year are as follows: $301 in 2026, $64 in 2027, $192 in 2028, $109 in 2029, $331 in 2030, $441 in 2031, $332 in 2032, $134 in 2033, $464 in 2034 and $670 in 2035. A full valuation allowance has been provided for these Spanish loss carry-forwards as the Company expects that the losses will not be utilized before their expiration. The effective income tax rate differs from the statutory rate as follows: 2017 2016 2015 U.S. statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net 1.6 1.0 1.1 Exempt municipal bond interest (0.1) (0.1) (0.1) Foreign tax rates 0.5 (0.4) (1.3) Qualified domestic production activities deduction (0.8) (2.7) (2.6) Tax credits receivable (1.4) (0.5) (1.2) Adjustment of deferred tax balances (24.2) (0.5) 0.2 Reserve for uncertain tax benefits (0.3) — (2.1) Worthless stock deduction (3.8) — — Other, net (1.9) (0.6) (0.4) Effective income tax rate 4.6 % 31.2 % 28.6 % The 2017 Tax Reform Act changes 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. This provision of the Act significantly impacts the accounting for the undistributed earnings of foreign subsidiaries and as a result the Company intends to distribute the earnings of its foreign subsidiaries. The costs associated with a future distribution are not material to the Company’s financial statements. After carefully considering these facts, the Company has determined that it will not be asserting permanent reinvestment of its foreign subsidiaries earnings as of December 31, 2017. At December 31, 2017 and 2016, the Company had unrecognized tax benefits of $4,342 and $4,746, respectively. Included in this balance is $2,475 and $2,761, respectively, of unrecognized tax benefits that, if recognized, would favorably affect the annual effective income tax rate. As of December 31, 2017 and 2016, $475 and $439, respectively, of interest and penalties were included in the liability for uncertain tax positions. A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows: 2017 2016 2015 Unrecognized tax benefits at January 1 $ 4,746 $ 4,680 $ 6,993 Increases in tax positions for the current year 394 803 812 Reductions in tax positions for lapse of statute of limitations (793) (718) (865) Reductions in tax positions relating to settlements with taxing authorities — (27) (772) Increases (decreases) in prior period unrecognized tax benefits (5) 8 (1,488) Unrecognized tax benefits at December 31 $ 4,342 $ 4,746 $ 4,680 The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes on the Consolidated Statements of Earnings and Retained Earnings. The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. The Company remains subject to examination by U.S. federal and state and foreign tax authorities for the years 2014 through 2016. With few exceptions, the Company is no longer subject to examinations by tax authorities for the years 2013 and prior. |
SHARE CAPITAL AND CAPITAL IN EX
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE | 12 Months Ended |
Dec. 31, 2017 | |
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE | |
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE | NOTE 5—SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE: Capital in Class B Excess Common Stock Common Stock Treasury Stock of Par Shares Amount Shares Amount Shares Amount Value (000’s) (000’s) (000’s) Balance at January 1, 2015 37,285 $ 25,892 22,887 $ 15,894 78 $ (1,992) $ 599,186 Issuance of 3% stock dividend 1,112 773 687 476 2 — 55,982 Conversion of Class B common shares to common shares 32 22 (32) (22) — — — Purchase and retirement of common shares (1,047) (727) — — — — (32,286) Balance at December 31, 2015 37,382 25,960 23,542 16,348 80 (1,992) 622,882 Issuance of 3% stock dividend 1,111 772 705 490 3 — 52,410 Conversion of Class B common shares to common shares 26 18 (26) (18) — — — Purchase and retirement of common shares (818) (569) — — — — (28,524) Balance at December 31, 2016 37,701 26,181 24,221 16,820 83 (1,992) 646,768 Issuance of 3% stock dividend 1,124 781 726 504 2 — 43,477 Conversion of Class B common shares to common shares 56 39 (56) (39) — — — Purchase and retirement of common shares (921) (640) — — — — (33,493) Balance at December 31, 2017 37,960 $ 26,361 24,891 $ 17,285 85 $ (1,992) $ 656,752 Average shares outstanding and all per share amounts included in the financial statements and notes thereto have been adjusted retroactively to reflect annual three percent stock dividends. While the Company does not have a formal or publicly announced Company common stock purchase program, the Company’s board of directors periodically authorizes a dollar amount for such share purchases. Based upon this policy, shares were purchased and retired as follows: Total Number of Shares Year Purchased (000’s) Average Price Paid Per Share 2017 921 $ 37.01 2016 818 $ 35.51 2015 1,047 $ 31.47 |
OTHER INCOME, NET
OTHER INCOME, NET | 12 Months Ended |
Dec. 31, 2017 | |
OTHER INCOME, NET | |
OTHER INCOME, NET | NOTE 6—OTHER INCOME, NET: Other income, net is comprised of the following: 2017 2016 2015 Interest and dividend income $ 2,851 $ 2,130 $ 1,421 Gains on trading securities relating to deferred compensation plans 9,977 4,275 1,450 Interest expense (144) (105) (76) Foreign exchange gains (losses) 259 (955) (1,427) Capital gains (losses) 25 7 2 Miscellaneous, net 177 146 126 $ 13,145 $ 5,498 $ 1,496 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | NOTE 7—EMPLOYEE BENEFIT PLANS: Pension plans: The Company sponsors defined contribution pension plans covering certain non-union employees with over one year of credited service. The Company’s policy is to fund pension costs accrued based on compensation levels. Total pension expense for 2017, 2016 and 2015 approximated $3,087, $3,126 and $3,100, respectively. The Company also maintains certain profit sharing and retirement savings-investment plans. Company contributions in 2017, 2016 and 2015 to these plans were $2,512, $2,493 and $2,533 respectively. The Company also contributes to a multi-employer defined benefit pension plan for certain of its union employees under a collective bargaining agreement which is as follows: Plan name: Bakery and Confectionery Union and Industry International Pension Fund Employer Identification Number and plan number: 52-6118572, plan number 001 Funded Status as of the most recent year available: 57.01% funded as of January 1, 2016 The Company’s contributions to such plan: $2,603, $2,515 and $2,574 in 2017, 2016 and 2015, respectively Plan status: Critical and declining as of December 31, 2016 Beginning in 2012, the Company received periodic notices from the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union Pension Plan (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”, the “Red Zone”, 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 fourth quarter 2012. During second quarter 2015, the Company received new notices that the Plan is now in “critical and declining status”, as defined by the PPA and PBGC, for the plan year beginning January 1, 2015. In second quarter 2016, the Company received new notices that the Plan’s trustees adopted an updated Rehabilitation Plan effective January 1, 2016, and that the Plan remains in “critical and declining status” and is projected to become insolvent the year 2030. A designation of “critical and declining status” implies that the Plan is expected to become insolvent in the next 20 years The Company has been advised that its withdrawal liability would have been $82,200, $72,700 and $61,000 if it had withdrawn from the Plan during 2017, 2016 and 2015, respectively. The increase from 2016 to 2017 principally reflects a decrease in the PBGC interest rates, a decrease in the assets and increase in the Plan’s unfunded vested benefits during 2016 and the Company comprising a larger share the Plan’s contribution base. 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. The amended rehabilitation plan, which continues, requires that employer contributions include 5% compounded annual surcharge increases each year for an unspecified period of time beginning January 2013 (in addition to the 5% interim surcharge initiated in June 2012) as well as certain plan benefit reductions. The Company’s pension expense for this Plan for 2017 and 2016 was $2,617 and $2,541, respectively. The aforementioned expense includes surcharges of $656 and $542 in 2017 and 2016, respectively, as required under the plan of rehabilitation as amended. The Company is currently unable to determine the ultimate outcome of the above discussed matter and therefore is unable to determine the effects on its consolidated financial statements, but the ultimate outcome or the effects of any modifications to the current rehabilitation plan could be material to its consolidated results of operations or cash flows in one or more future periods. Deferred compensation: The Company sponsors three deferred compensation plans for selected executives and other employees: (i) the Excess Benefit Plan, which restores retirement benefits lost due to IRS limitations on contributions to tax-qualified plans, (ii) the Supplemental Plan, which allows eligible employees to defer the receipt of eligible compensation until designated future dates and (iii) the Career Achievement Plan, which provides a deferred annual incentive award to selected executives. Participants in these plans earn a return on amounts due them based on several investment options, which mirror returns on underlying investments (primarily mutual funds). The Company economically hedges its obligations under the plans by investing in the actual underlying investments. These investments are classified as trading securities and are carried at fair value. At December 31, 2017 and 2016, these investments totaled $60,520 and $67,995, respectively. All gains and losses and related investment income from these investments, which are recorded in other income, net, are equally offset by corresponding increases and decreases in the Company’s deferred compensation liabilities. Postretirement health care benefit plans: The Company maintains a post-retirement health benefits plan for a group of “grandfathered” corporate employees. The plan as amended in 2013, generally limited future annual cost increases in health benefits to 3%, restricted this benefit to current employees and retirees with long-term service with the Company, and eliminated all post-retirement benefits for future employees effective April 1, 2014. Post-retirement benefits liabilities (as amended) were $13,497 and $12,128 at December 31, 2017 and 2016, respectively. Amounts recognized in accumulated other comprehensive loss (pre-tax) at December 31, 2017 are as follows: Prior service credit $ (5,519) Net actuarial gain (713) Net amount recognized in accumulated other comprehensive loss $ (6,232) The estimated actuarial gain and prior service credit to be amortized from accumulated other comprehensive loss into net periodic benefit income during 2018 are $97 and $1,226, respectively. The changes in the accumulated postretirement benefit obligation at December 31, 2017 and 2016 consist of the following: December 31, 2017 2016 Benefit obligation, beginning of year $ 12,128 $ 11,400 Service cost 323 331 Interest cost 468 462 Actuarial (gain)/loss 897 235 Benefits paid (319) (300) Benefit obligation, end of year $ 13,497 $ 12,128 Net periodic postretirement benefit cost (income) included the following components: 2017 2016 2015 Service cost—benefits attributed to service during the period $ 323 $ 331 $ 441 Interest cost on the accumulated postretirement benefit obligation 468 462 465 Net amortization (1,462) (1,642) (1,451) Net periodic postretirement benefit cost (income) $ (671) $ (849) $ (545) The Company estimates future benefit payments will be $603, $525, $556, $598 and $632 in 2018 through 2022, respectively, and a total of $3,647 in 2023 through 2027. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS | |
COMMITMENTS | NOTE 8—COMMITMENTS: Rental expense aggregated $785, $703 and $728 in 2017, 2016 and 2015, respectively. Future operating lease commitments are not significant. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
SEGMENT AND GEOGRAPHIC INFORMATION | NOTE 9—SEGMENT AND GEOGRAPHIC INFORMATION: The Company operates as a single reportable segment encompassing the manufacture and sale of confectionery products. Its principal manufacturing operations are located in the United States and Canada, and its principal market is the United States. The Company also manufactures confectionery products in Mexico primarily for sale in Mexico, and exports products to Canada and other countries worldwide. The following geographic data includes net product sales summarized on the basis of the customer location and long-lived assets based on their physical location: 2017 2016 2015 Net product sales: United States $ 472,222 $ 475,055 $ 492,450 Canada, Mexico and Other 43,452 42,318 44,242 $ 515,674 $ 517,373 $ 536,692 Long-lived assets: United States $ 145,210 $ 147,296 $ 149,144 Canada 30,823 29,806 31,408 Mexico and Other 2,939 3,803 4,034 $ 178,972 $ 180,905 $ 184,586 Sales revenues from Wal-Mart Stores, Inc. aggregated approximately 24.0%, 23.3%, and 23.7% of net product sales during the years ended December 31, 2017, 2016 and 2015, respectively. Some of the aforementioned sales to Wal-Mart are sold to McLane Company, a large national grocery wholesaler, which services and delivers certain of the Company products to Wal-Mart and other retailers in the U.S.A. Net product sales revenues from McLane, which includes these Wal-Mart sales as well as sales and deliveries to other Company customers, were 16.9% in 2017 and 16.3% in 2016 and 16.7% in 2015. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 10—FAIR VALUE MEASUREMENTS: Current accounting guidance defines fair value as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Guidance requires disclosure of the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date. Guidance establishes a three-level valuation hierarchy based upon the transparency of inputs utilized in the measurement and valuation of financial assets or liabilities as of the measurement date. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the table below. As of December 31, 2017 and 2016, the Company held certain financial assets that are required to be measured at fair value on a recurring basis. These include derivative hedging instruments related to the foreign currency forward contracts and purchase of certain raw materials, investments in trading securities and available for sale securities. The Company’s available for sale and trading securities principally consist of municipal bonds and variable rate demand notes. The following tables present information about the Company’s financial assets and liabilities measured at fair value as of December 31, 2017 and 2016, and indicate the fair value hierarchy and the valuation techniques utilized by the Company to determine such fair value: Estimated Fair Value December 31, 2017 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 96,314 $ 96,314 $ — $ — Available for sale securities 171,596 1,200 170,396 — Foreign currency forward contracts 79 — 79 — Commodity futures contracts, net 32 32 — — Trading securities 60,520 60,520 — — Total assets measured at fair value $ 328,541 $ 158,066 $ 170,475 $ — Estimated Fair Value December 31, 2016 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 119,145 $ 119,145 $ — $ — Available for sale securities 164,183 2,419 161,764 — Foreign currency forward contracts (119) — (119) — Commodity futures contracts, net 1,746 1,746 — — Trading securities 67,995 67,995 — — Total assets measured at fair value $ 352,950 $ 191,305 $ 161,645 $ — Available for sale securities which utilize Level 2 inputs consist primarily of municipal and corporate bonds, which are valued based on quoted market prices or alternative pricing sources with reasonable levels of price transparency. A summary of the aggregate fair value, gross unrealized gains, gross unrealized losses, realized losses and amortized cost basis of the Company’s investment portfolio by major security type is as follows: December 31, 2017 Amortized Fair Unrealized Realized Available for Sale: Cost Value Gains Losses Losses Municipal bonds $ 32,411 $ 31,484 $ — $ (927) $ — Corporate bonds 134,143 133,684 — (459) — Government securities 1,192 1,208 16 — — Certificates of deposit 5,245 5,220 — (25) — $ 172,991 $ 171,596 $ 16 $ (1,411) $ — December 31, 2016 Amortized Fair Unrealized Realized Available for Sale: Cost Value Gains Losses Losses Municipal bonds $ 16,046 $ 15,206 $ — $ (840) $ — Variable rate demand notes 19,700 19,700 — — — Corporate bonds 122,568 122,298 — (270) — Government securities 2,411 2,426 15 — — Certificates of deposit 4,553 4,553 — — — $ 165,278 $ 164,183 $ 15 $ (1,110) $ — The fair value of the Company’s industrial revenue development bonds at December 31, 2017 and 2016 were valued using Level 2 inputs which approximates the carrying value of $7,500 for both periods. Interest rates on these bonds reset weekly based on current market conditions. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2017 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 11—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES: From time to time, the Company uses derivative instruments, including foreign currency forward contracts, commodity futures contracts and commodity option contracts, to manage its exposures to foreign exchange and commodity prices. Commodity futures contracts and most commodity option contracts are intended and effective as hedges of market price risks associated with the anticipated purchase of certain raw materials (primarily sugar). Foreign currency forward contracts are intended and effective as hedges of the Company’s exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of products manufactured in Canada and sold in the United States, and periodic equipment purchases from foreign suppliers denominated in a foreign currency. The Company does not engage in trading or other speculative use of derivative instruments. The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Consolidated Statements of Financial Position. Derivative assets are recorded in other receivables and derivative liabilities are recorded in accrued liabilities. The Company uses either hedge accounting or mark-to-market accounting for its derivative instruments. Derivatives that qualify for hedge accounting are designated as cash flow hedges by formally documenting the hedge relationships, including identification of the hedging instruments, the hedged items and other critical terms, as well as the Company’s risk management objectives and strategies for undertaking the hedge transaction. Changes in the fair value of the Company’s cash flow hedges are recorded in accumulated other comprehensive loss, net of tax, and are reclassified to earnings in the periods in which earnings are affected by the hedged item. Substantially all amounts reported in accumulated other comprehensive loss for commodity derivatives are expected to be reclassified to cost of goods sold. Approximately $84 of this accumulated comprehensive gain is expected to be reclassified to earnings in 2018 and a $52 accumulated comprehensive loss is expected to be reclassified as a charge to earnings in 2019. Substantially all amounts reported in accumulated other comprehensive loss for foreign currency derivatives are expected to be reclassified to other income, net in 2018. The following table summarizes the Company’s outstanding derivative contracts and their effects on its Consolidated Statements of Financial Position at December 31, 2017 and 2016: December 31, 2017 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ 919 $ 79 $ — Commodity futures contracts 13,840 284 (252) Total derivatives $ 363 $ (252) December 31, 2016 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ 2,357 $ — $ (119) Commodity futures contracts 10,811 1,932 (186) Total derivatives $ 1,932 $ (305) The effects of derivative instruments on the Company’s Consolidated Statement of Earnings, Comprehensive Earnings and Retained Earnings for years ended December 31, 2017 and 2016 are as follows: For Year Ended December 31, 2017 Gain (Loss) Gain (Loss) on Amount Excluded Gain (Loss) Reclassified from from Effectiveness Recognized Accumulated OCI Testing Recognized in OCI into Earnings in Earnings Foreign currency forward contracts $ 236 $ 39 $ — Commodity futures contracts (1,646) 68 — Total $ (1,410) $ 107 $ — For Year Ended December 31, 2016 Gain (Loss) Gain (Loss) on Amount Excluded Gain (Loss) Reclassified from from Effectiveness Recognized Accumulated OCI Testing Recognized in OCI into Earnings in Earnings Foreign currency forward contracts $ 511 $ (1,997) $ — Commodity futures contracts 2,321 847 — Total $ 2,832 $ (1,150) $ — |
COMPREHENSIVE EARNINGS (LOSS)
COMPREHENSIVE EARNINGS (LOSS) | 12 Months Ended |
Dec. 31, 2017 | |
COMPREHENSIVE EARNINGS (LOSS) | |
COMPREHENSIVE EARNINGS (LOSS) | NOTE 12—ACCUMULATED OTHER COMPREHENSIVE LOSS: The following table sets forth information with respect to accumulated other comprehensive earnings (loss): Accumulated Foreign Foreign Postretirement Other Currency Currency Commodity and Pension Comprehensive Translation Investments Derivatives Derivatives Benefits Earnings (Loss) Balance at December 31, 2015 $ (21,644) $ (605) $ (1,675) $ 173 $ 6,387 $ (17,364) Other comprehensive earnings (loss) before reclassifications (3,816) (95) 325 1,481 (466) (2,571) Reclassifications from accumulated other comprehensive loss — 3 1,274 (540) (1,048) (311) Other comprehensive earnings (loss) net of tax (3,816) (92) 1,599 941 (1,514) (2,882) Balance at December 31, 2016 $ (25,460) $ (697) $ (76) $ 1,114 $ 4,873 $ (20,246) Other comprehensive earnings (loss) before reclassifications 1,198 (192) 152 (1,050) (651) (543) Reclassifications from accumulated other comprehensive loss — — (25) (44) (933) (1,002) Other comprehensive earnings (loss) net of tax 1,198 (192) 127 (1,094) (1,584) (1,545) Balance at December 31, 2017 $ (24,262) $ (889) $ 51 $ 20 $ 3,289 $ (21,791) The amounts reclassified from accumulated other comprehensive income (loss) consisted of the following: Details about Accumulated Other Year to Date Ended Comprehensive Income Components December 31, 2017 December 31, 2016 Location of (Gain) Loss Recognized in Earnings Investments $ - $ 5 Other income, net Foreign currency derivatives (39) 1,997 Other income, net Commodity derivatives (68) (847) Product cost of goods sold Postretirement and pension benefits (746) (838) Selling, marketing and administrative expenses Postretirement and pension benefits (716) (804) Product cost of goods sold Total before tax (1,569) (487) Tax expense (benefit) 567 176 Net of tax $ (1,002) $ (311) |
GOODWILL AND INTANGIBLE ASSETS_
GOODWILL AND INTANGIBLE ASSETS: | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS: | |
GOODWILL AND INTANGIBLE ASSETS: | NOTE 13—GOODWILL AND INTANGIBLE ASSETS: All of the Company’s intangible indefinite-lived assets are trademarks. The changes in the carrying amount of trademarks for 2017 and 2016 were as follows: 2017 2016 Original cost $ 193,767 $ 193,767 Accumulated impairment losses as of January 1 (18,743) (18,743) Balance at January 1 $ 175,024 $ 175,024 Current year impairment losses — — Balance at December 31 $ 175,024 $ 175,024 Accumulated impairment losses as of December 31 $ (18,743) $ (18,743) The fair value of indefinite-lived intangible assets was primarily assessed using the present value of estimated future cash flows and relief-from-royalty method. The Company has no accumulated impairment losses of goodwill. |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED): | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY FINANCIAL DATA (UNAUDITED): | |
QUARTERLY FINANCIAL DATA (UNAUDITED): | NOTE 14—QUARTERLY FINANCIAL DATA (UNAUDITED): (Thousands of dollars except per share data) First Second Third Fourth Year 2017 Net product sales $ 103,425 $ 104,897 $ 182,173 $ 125,179 $ 515,674 Product gross margin 38,009 39,638 67,325 44,778 189,750 Net earnings attributable to Tootsie Roll Industries, Inc. 10,051 11,895 26,933 31,985 80,864 Net earnings attributable to Tootsie Roll Industries, Inc. per share 0.16 0.19 0.43 0.51 1.28 2016 Net product sales $ 103,362 $ 104,259 $ 185,473 $ 124,279 $ 517,373 Product gross margin 37,538 39,250 70,725 49,570 197,083 Net earnings attributable to Tootsie Roll Industries, Inc. 9,896 11,136 28,637 17,841 67,510 Net earnings attributable to Tootsie Roll Industries, Inc. per share 0.15 0.17 0.45 0.28 1.05 Net earnings per share is based upon average outstanding shares as adjusted for 3% stock dividends issued during the second quarter of each year as discussed above. The sum of the quarterly per share amounts may not equal annual amounts due to rounding. In connection with enactment of the U.S. Tax Cuts and Jobs Act (Tax Reform Act) in December 2017, the Company recorded a favorable accounting adjustment of $20,318, or $0.32 per share, during the fourth quarter of 2017. This reflects the estimated benefit from the revaluation of net deferred income tax liabilities based on the new lower U.S. corporate income tax rate effective January 1, 2018. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2017 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | Additions (reductions) Balance at charged Balance at beginning (credited) to End of Description of year expense Deductions(1) Year 2017: Reserve for bad debts $ 1,225 $ 27 $ 55 $ 1,197 Reserve for cash discounts 659 9,268 9,203 724 Deferred tax asset valuation 2,317 952 — 3,269 $ 4,201 $ 10,247 $ 9,258 $ 5,190 2016: Reserve for bad debts $ 1,410 $ (166) $ 19 $ 1,225 Reserve for cash discounts 815 9,247 9,403 659 Deferred tax asset valuation 2,077 240 — 2,317 $ 4,302 $ 9,321 $ 9,422 $ 4,201 2015: Reserve for bad debts $ 1,300 $ 267 $ 157 $ 1,410 Reserve for cash discounts 668 9,678 9,531 815 Deferred tax asset valuation 2,478 (401) — 2,077 $ 4,446 $ 9,544 $ 9,688 $ 4,302 |
SIGNIFICANT ACCOUNTING POLICI22
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of consolidation | Basis of consolidation: The consolidated financial statements include the accounts of Tootsie Roll Industries, Inc. and its wholly-owned and majority-owned subsidiaries (the Company), which are primarily engaged in the manufacture and sales of candy products. Non-controlling interests relating to majority-owned subsidiaries are reflected in the consolidated financial statements and all significant intercompany transactions have been eliminated. Certain amounts previously reported have been reclassified to conform to the current year presentation. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue recognition | Revenue recognition: Products are sold to customers based on accepted purchase orders which include quantity, sales price and other relevant terms of sale. Revenue, net of applicable provisions for discounts, returns, allowances and certain advertising and promotional costs, including consumer coupons (price reduction), is recognized when products are delivered to customers and collectability is reasonably assured. Shipping and handling costs of $43,973, $40,629, and $42,619 in 2017, 2016 and 2015, respectively, are included in selling, marketing and administrative expenses. Accounts receivable are unsecured. |
Cash and cash equivalents | Cash and cash equivalents: The Company considers temporary cash investments with an original maturity of three months or less to be cash equivalents. |
Investments | Investments: Investments consist of various marketable securities with maturities of generally up to three years, and variable rate demand notes with interest rates that are generally reset weekly and the security can be “put” back and sold weekly. The Company classifies debt and equity securities as either available for sale or trading. Available for sale securities are not actively traded by the Company and are carried at fair value. The Company follows current fair value measurement guidance and unrealized gains and losses on these securities are excluded from earnings and are reported as a separate component of shareholders’ equity, net of applicable taxes, until realized or other-than-temporarily impaired. Trading securities related to deferred compensation arrangements are carried at fair value with gains or losses included in other income, net. The Company invests in trading securities to economically hedge changes in its deferred compensation liabilities. The Company regularly reviews its investments to determine whether a decline in fair value below the cost basis is other-than-temporary. If the decline in fair value is judged to be other-than-temporary, the cost basis of the security is written down to fair value and the amount of the write-down is included in other income, net. Further information regarding the fair value of the Company’s investments is included in Note 10 of the Company’s Notes to Consolidated Financial Statements. |
Derivative instruments and hedging activities | Derivative instruments and hedging activities: Authoritative guidance requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of derivative instruments and related gains and losses, and disclosures about credit-risk-related contingent features in derivative agreements. From time to time, the Company enters into commodity futures, commodity options contracts and foreign currency forward contracts. Commodity futures and options are intended and are effective as hedges of market price risks associated with the anticipated purchase of certain raw materials (primarily sugar). Foreign currency forward contracts are intended and are effective as hedges of the Company’s exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of products manufactured in Canada and sold in the United States, and periodic equipment purchases from foreign suppliers denominated in a foreign currency. The Company does not engage in trading or other speculative use of derivative instruments. Further information regarding derivative instruments and hedging activities is included in Note 11 of the Company’s Notes to Consolidated Financial Statements. |
Inventories | Inventories: Inventories are stated at cost, not to exceed market. The cost of substantially all of the Company’s inventories ($51,694 and $53,278 at December 31, 2017 and 2016, respectively) has been determined by the last-in, first-out (LIFO) method. The excess of current cost over LIFO cost of inventories approximates $18,825 and $17,574 at December 31, 2017 and 2016, respectively. The cost of certain foreign inventories ($4,423 and $4,253 at December 31, 2017 and 2016, respectively) has been determined by the first-in, first-out (FIFO) method. Rebates, discounts and other cash consideration received from vendors related to inventory purchases is reflected as a reduction in the cost of the related inventory item, and is, therefore, reflected in cost of sales when the related inventory item is sold. |
Property, plant and equipment | Property, plant and equipment: Depreciation is computed for financial reporting purposes by use of the straight-line method based on useful lives of 20 to 35 years for buildings and 5 to 20 years for machinery and equipment. Depreciation expense was $18,991, $19,627 and $20,388 in 2017, 2016 and 2015, respectively. |
Carrying value of long-lived assets | Carrying value of long-lived assets: The Company reviews long-lived assets to determine if there are events or circumstances indicating that the amount of the asset reflected in the Company’s balance sheet may not be recoverable. When such indicators are present, the Company compares the carrying value of the long-lived asset, or asset group, to the future undiscounted cash flows of the underlying assets to determine if impairment exists. If applicable, an impairment charge would be recorded to write down the carrying value to its fair value. The determination of fair value involves the use of estimates of future cash flows that involve considerable management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance, and economic conditions. In fourth quarter 2017, the Company recorded a charge of $2,371 relating to the impairment of assets of a foreign subsidiary which is included in selling, marketing and administrative expense. No impairment charges of long-lived assets were recorded by the Company during 2016 and 2015. |
Postretirement health care benefits | Postretirement health care benefits: The Company provides certain postretirement health care benefits to a group of “grandfathered” corporate office and management employees. The cost of these postretirement benefits is accrued during the employees’ working careers. See Note 7 of the Company’s Notes to Consolidated Financial Statements for additional information. The Company also provides split dollar life benefits to certain executive officers. The Company records an asset equal to the cumulative insurance premiums paid that will be recovered upon the death of covered employees or earlier under the terms of the plan. No premiums were paid in 2017, 2016 and 2015. Certain split dollar agreements were terminated during 2015 which resulted in the full repayment to the Company of all of the cumulative premiums previously paid on these policies. No split dollar agreements were terminated during 2016 or 2017. During 2015, the Company received $7,591 of such repayments which was recorded as a reduction in the carrying value of Split Dollar Officer Life Insurance. |
Goodwill and indefinite-lived intangible assets | Goodwill and indefinite-lived intangible assets: In accordance with authoritative guidance, goodwill and intangible assets with indefinite lives are not amortized, but rather reviewed and tested for impairment at least annually unless certain interim triggering events or circumstances require more frequent testing. All trademarks have been assessed by management to have indefinite lives because they are expected to generate cash flows indefinitely. Management believes that all assumptions used for the impairment review and testing are consistent with those utilized by market participants performing similar valuations. No impairments of intangibles, including trademarks and goodwill, were recorded in 2017, 2016 or 2015. 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 the two step impairment testing process (quantitative analysis) as prescribed in the guidance. During fourth quarter 2017, the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance. Impairment testing of certain trademarks where the “step-zero” analysis was not considered appropriate was performed in fourth quarter 2017 using discounted cash flows and estimated royalty rates. |
Income taxes | Income taxes: Deferred income taxes are recorded and recognized for future tax effects of temporary differences between financial and income tax reporting. The Company records valuation allowances in situations where the realization of deferred tax assets is not more-likely-than-not. Further information regarding U.S. tax reform and other income tax matters are included in Note 4 of the Company’s Notes to Consolidated Financial Statements. |
Foreign currency translation | Foreign currency translation: The U.S. dollar is used as the functional currency where a substantial portion of the subsidiary’s business is indexed to the U.S. dollar or where its manufactured products are principally sold in the U.S. All other foreign subsidiaries use the local currency as their functional currency. Where the U.S. dollar is used as the functional currency, foreign currency remeasurements are recorded as a charge or credit to other income, net in the statement of earnings. Where the foreign local currency is used as the functional currency, translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss). |
Restricted cash | Restricted cash: Restricted cash comprises certain cash deposits of the Company’s majority-owned Spanish subsidiaries with international banks that are pledged as collateral for letters of credit and bank borrowings. |
VEBA trust | VEBA trust: The Company maintains 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 made a $20,024 contribution to the VEBA trust in fourth quarter 2017 but no contribution were made to the trust in 2016. The Company will be using the VEBA trust funds to pay the actual cost of such benefits through 2022. At December 31, 2017 and 2016, the VEBA trust held $19,713 and $3,027, respectively, of aggregate cash and cash equivalents. This asset value is included in prepaid expenses and long-term other assets in the Company’s Consolidated Statement of Financial Position. These assets are categorized as Level 1 within the fair value hierarchy. |
Bank loans | Bank loans: Bank loans comprise borrowings by the Company’s majority-owned Spanish subsidiaries which are held by international banks. |
Comprehensive earnings | Comprehensive earnings: Comprehensive earnings include net earnings, foreign currency translation adjustments and unrealized gains/losses on commodity and/or foreign currency hedging contracts, available for sale securities and certain postretirement benefit obligations. |
Earnings per share | Earnings per share: A dual presentation of basic and diluted earnings per share is not required due to the lack of potentially dilutive securities under the Company’s simple capital structure. Therefore, all earnings per share amounts represent basic earnings per share. The Class B common stock has essentially the same rights as common stock, except that each share of Class B common stock has ten votes per share (compared to one vote per share of common stock), is not traded on any exchange, is restricted as to transfer and is convertible on a share-for-share basis, at any time and at no cost to the holders, into shares of common stock which are traded on the New York Stock Exchange. |
Use of estimates | Use of estimates: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates are used when accounting for sales discounts, allowances and incentives, product liabilities, assets recorded at fair value, income taxes, depreciation, amortization, employee benefits, contingencies and intangible asset and liability valuations. Actual results may or may not differ from those estimates. |
Recent accounting pronouncements | Recent accounting pronouncements: In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company has substantially completed its evaluation of the new guidance, and based upon this evaluation, the Company does not believe that the adoption of this new guidance will have a material effect on its consolidated statements of earnings, but management is expecting to reduce certain accrued liabilities (and increase retained earnings) relating to variable consideration, as defined by the new guidance on its consolidated statement of financial position (balance sheet). The Company is adopting the new standard effective January 1, 2018 (first quarter 2018), on a “modified retrospective” basis. In January 2016, the FASB issued ASU 2016-01 which modifies certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. The Company does not expect this standard will have a significant impact on the Company’s consolidated financial statements upon adoption. In February 2016, the FASB issued ASU 2016-02 which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This ASU also provides clarifications surrounding the presentation of the effects of leases in the income statement and statement of cash flows. This guidance will be effective for the Company on January 1, 2019. The Company owns substantially all of its real and personal property and does not expect this standard will have a significant impact on the Company’s consolidated financial statements upon adoption. In April 2016, the FASB issued ASU 2016-10, which contains amendments to the new revenue recognition standard on identifying performance obligations and accounting for licenses of intellectual property. The amendments related to identifying performance obligations clarify when a promised good or service is separately identifiable and allows entities to disregard items that are immaterial in the context of a contract. The licensing implementation amendments clarify how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether revenue is recognized over time or at a point in time. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company does not have any significant licenses of intellectual property and does not expect this standard will have a significant impact on the Company’s consolidated financial statements upon adoption. In August 2016, the FASB issued ASU 2016-15, which includes amendments addressing eight specific cash flow issues with the objective of reducing the existing diversity in practice. The effective date of the amendments to the standard is for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not expect this standard will have a significant impact on the Company’s consolidated financial statements upon adoption. In March 2017, the FASB issued ASU 2017-07, which requires employers who offer defined benefit and postretirement benefit plans to report the service cost component in the same line item as other compensation costs arising from services rendered by employees during the reporting period. The other components of net benefit costs will be presented in the income statement separately from the service cost and outside of a subtotal of income from operations. In addition, only the service cost component may be eligible for capitalization where applicable. This guidance is effective for annual periods beginning after December 15, 2017. The Company does not expect this standard will have a significant impact on the Company’s consolidated financial statements upon adoption. In August 2017, the FASB issued ASU 2017-12, guidance that amends hedge accounting. Under the new guidance, more hedging strategies will be eligible for hedge accounting and the application of hedge accounting is simplified. The new guidance amends presentation and disclosure requirements, and how effectiveness is assessed. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, which allows for the reclassification of certain income tax effects related to the U.S. Tax Cuts and Jobs Act (Tax Reform Act) between “Accumulated other comprehensive income” and “Retained earnings.” This ASU relates to the requirement that adjustments to deferred tax liabilities and assets related to a change in tax laws or rates to be included in “Income from continuing operations”, even in situations where the related items were originally recognized in “Other comprehensive income” (rather than in “Earnings from operations”). The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this ASU is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax laws or rates were recognized. The Company is currently evaluating the new guidance to determine the impact it may have on the consolidated financial statements. Recently adopted pronouncements: In November 2015, the FASB issued ASU 2015-17 which simplifies the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be classified as non-current in a classified statement of financial position. This guidance was adopted on January 1, 2017 on a prospective basis. Prior period balances have not been adjusted. In January 2017, the FASB issued ASU No. 2017-04 which simplifies the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. A goodwill impairment is now the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU No. 2017-04 will be effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption was permitted for any impairment tests performed after January 1, 2017, and the Company early adopted this ASU effective in the fourth quarter of 2017. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements. |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCRUED LIABILITIES | |
Schedule of accrued liabilities | December 31, 2017 2016 Compensation $ 10,107 $ 9,840 Other employee benefits 7,659 7,012 Taxes, other than income 3,210 3,004 Advertising and promotions 18,834 21,421 Other 5,347 5,023 $ 45,157 $ 46,300 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
Schedule of domestic and foreign components of pretax income | 2017 2016 2015 Domestic $ 76,042 $ 87,016 $ 82,276 Foreign 8,519 10,896 10,302 $ 84,561 $ 97,912 $ 92,578 |
Schedule of components of provision of income taxes | 2017 2016 2015 Current: Federal $ 6,019 $ 28,484 $ 26,259 Foreign — 86 (596) State 369 1,954 785 6,388 30,524 26,448 Deferred: Federal (7,191) (2,547) (1,189) Foreign 3,425 3,323 2,106 State 1,285 (707) (914) (2,481) 69 3 $ 3,907 $ 30,593 $ 26,451 |
Schedule of significant components of net deferred tax liability | December 31, 2017 2016 Deferred tax assets: Accrued customer promotions $ 1,583 $ 3,194 Deferred compensation 15,403 26,509 Postretirement benefits 3,352 4,732 Other accrued expenses 4,200 6,543 Foreign subsidiary tax loss carry forward 7,270 8,452 Tax credit carry forward 3,435 2,514 35,243 51,944 Valuation allowance (3,269) (2,317) Total deferred tax assets $ 31,974 $ 49,627 Deferred tax liabilities: Depreciation $ 18,791 $ 28,049 Deductible goodwill and trademarks 34,593 45,733 Accrued export company commissions 4,189 6,044 Employee benefit plans 4,662 928 Inventory reserves 2,147 3,529 Prepaid insurance 769 1,015 Other prepaid expenses 1,196 — Deferred foreign exchange gain 405 436 Unrealized capital gain 977 733 Deferred gain on sale of real estate 5,278 8,093 Total deferred tax liabilities $ 73,007 $ 94,560 Net deferred tax liability $ 41,033 $ 44,933 |
Schedule of reconciliation of statutory and effective income tax rate | 2017 2016 2015 U.S. statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net 1.6 1.0 1.1 Exempt municipal bond interest (0.1) (0.1) (0.1) Foreign tax rates 0.5 (0.4) (1.3) Qualified domestic production activities deduction (0.8) (2.7) (2.6) Tax credits receivable (1.4) (0.5) (1.2) Adjustment of deferred tax balances (24.2) (0.5) 0.2 Reserve for uncertain tax benefits (0.3) — (2.1) Worthless stock deduction (3.8) — — Other, net (1.9) (0.6) (0.4) Effective income tax rate 4.6 % 31.2 % 28.6 % |
Schedule of reconciliation of beginning and ending balances of total amounts of unrecognized tax benefits | 2017 2016 2015 Unrecognized tax benefits at January 1 $ 4,746 $ 4,680 $ 6,993 Increases in tax positions for the current year 394 803 812 Reductions in tax positions for lapse of statute of limitations (793) (718) (865) Reductions in tax positions relating to settlements with taxing authorities — (27) (772) Increases (decreases) in prior period unrecognized tax benefits (5) 8 (1,488) Unrecognized tax benefits at December 31 $ 4,342 $ 4,746 $ 4,680 |
SHARE CAPITAL AND CAPITAL IN 25
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE | |
Schedule of changes in share capital and capital in excess of par value | Capital in Class B Excess Common Stock Common Stock Treasury Stock of Par Shares Amount Shares Amount Shares Amount Value (000’s) (000’s) (000’s) Balance at January 1, 2015 37,285 $ 25,892 22,887 $ 15,894 78 $ (1,992) $ 599,186 Issuance of 3% stock dividend 1,112 773 687 476 2 — 55,982 Conversion of Class B common shares to common shares 32 22 (32) (22) — — — Purchase and retirement of common shares (1,047) (727) — — — — (32,286) Balance at December 31, 2015 37,382 25,960 23,542 16,348 80 (1,992) 622,882 Issuance of 3% stock dividend 1,111 772 705 490 3 — 52,410 Conversion of Class B common shares to common shares 26 18 (26) (18) — — — Purchase and retirement of common shares (818) (569) — — — — (28,524) Balance at December 31, 2016 37,701 26,181 24,221 16,820 83 (1,992) 646,768 Issuance of 3% stock dividend 1,124 781 726 504 2 — 43,477 Conversion of Class B common shares to common shares 56 39 (56) (39) — — — Purchase and retirement of common shares (921) (640) — — — — (33,493) Balance at December 31, 2017 37,960 $ 26,361 24,891 $ 17,285 85 $ (1,992) $ 656,752 |
Schedule of shares purchased and retired | Total Number of Shares Year Purchased (000’s) Average Price Paid Per Share 2017 921 $ 37.01 2016 818 $ 35.51 2015 1,047 $ 31.47 |
OTHER INCOME, NET (Tables)
OTHER INCOME, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
OTHER INCOME, NET | |
Schedule of other income, net | 2017 2016 2015 Interest and dividend income $ 2,851 $ 2,130 $ 1,421 Gains on trading securities relating to deferred compensation plans 9,977 4,275 1,450 Interest expense (144) (105) (76) Foreign exchange gains (losses) 259 (955) (1,427) Capital gains (losses) 25 7 2 Miscellaneous, net 177 146 126 $ 13,145 $ 5,498 $ 1,496 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of amounts recognized in accumulated other comprehensive loss (pre-tax) | Prior service credit $ (5,519) Net actuarial gain (713) Net amount recognized in accumulated other comprehensive loss $ (6,232) |
Schedule of changes in accumulated postretirement benefit obligation | December 31, 2017 2016 Benefit obligation, beginning of year $ 12,128 $ 11,400 Service cost 323 331 Interest cost 468 462 Actuarial (gain)/loss 897 235 Benefits paid (319) (300) Benefit obligation, end of year $ 13,497 $ 12,128 |
Schedule of net periodic postretirement benefit cost (income) | 2017 2016 2015 Service cost—benefits attributed to service during the period $ 323 $ 331 $ 441 Interest cost on the accumulated postretirement benefit obligation 468 462 465 Net amortization (1,462) (1,642) (1,451) Net periodic postretirement benefit cost (income) $ (671) $ (849) $ (545) |
SEGMENT AND GEOGRAPHIC INFORM28
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
Schedule of geographic data | 2017 2016 2015 Net product sales: United States $ 472,222 $ 475,055 $ 492,450 Canada, Mexico and Other 43,452 42,318 44,242 $ 515,674 $ 517,373 $ 536,692 Long-lived assets: United States $ 145,210 $ 147,296 $ 149,144 Canada 30,823 29,806 31,408 Mexico and Other 2,939 3,803 4,034 $ 178,972 $ 180,905 $ 184,586 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities measured at fair value | Estimated Fair Value December 31, 2017 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 96,314 $ 96,314 $ — $ — Available for sale securities 171,596 1,200 170,396 — Foreign currency forward contracts 79 — 79 — Commodity futures contracts, net 32 32 — — Trading securities 60,520 60,520 — — Total assets measured at fair value $ 328,541 $ 158,066 $ 170,475 $ — Estimated Fair Value December 31, 2016 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 119,145 $ 119,145 $ — $ — Available for sale securities 164,183 2,419 161,764 — Foreign currency forward contracts (119) — (119) — Commodity futures contracts, net 1,746 1,746 — — Trading securities 67,995 67,995 — — Total assets measured at fair value $ 352,950 $ 191,305 $ 161,645 $ — |
Summary of the aggregate fair value, gross unrealized gains, gross unrealized losses, realized losses and amortized cost basis of investment portfolio by major security type | December 31, 2017 Amortized Fair Unrealized Realized Available for Sale: Cost Value Gains Losses Losses Municipal bonds $ 32,411 $ 31,484 $ — $ (927) $ — Corporate bonds 134,143 133,684 — (459) — Government securities 1,192 1,208 16 — — Certificates of deposit 5,245 5,220 — (25) — $ 172,991 $ 171,596 $ 16 $ (1,411) $ — December 31, 2016 Amortized Fair Unrealized Realized Available for Sale: Cost Value Gains Losses Losses Municipal bonds $ 16,046 $ 15,206 $ — $ (840) $ — Variable rate demand notes 19,700 19,700 — — — Corporate bonds 122,568 122,298 — (270) — Government securities 2,411 2,426 15 — — Certificates of deposit 4,553 4,553 — — — $ 165,278 $ 164,183 $ 15 $ (1,110) $ — |
DERIVATIVE INSTRUMENTS AND HE30
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Summary of the Company's outstanding derivative contracts and their effects on the Condensed Consolidated Statements of Financial Position | December 31, 2017 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ 919 $ 79 $ — Commodity futures contracts 13,840 284 (252) Total derivatives $ 363 $ (252) December 31, 2016 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ 2,357 $ — $ (119) Commodity futures contracts 10,811 1,932 (186) Total derivatives $ 1,932 $ (305) |
Effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Retained Earnings, and the Condensed Consolidated Statement of Comprehensive Earnings | For Year Ended December 31, 2017 Gain (Loss) Gain (Loss) on Amount Excluded Gain (Loss) Reclassified from from Effectiveness Recognized Accumulated OCI Testing Recognized in OCI into Earnings in Earnings Foreign currency forward contracts $ 236 $ 39 $ — Commodity futures contracts (1,646) 68 — Total $ (1,410) $ 107 $ — For Year Ended December 31, 2016 Gain (Loss) Gain (Loss) on Amount Excluded Gain (Loss) Reclassified from from Effectiveness Recognized Accumulated OCI Testing Recognized in OCI into Earnings in Earnings Foreign currency forward contracts $ 511 $ (1,997) $ — Commodity futures contracts 2,321 847 — Total $ 2,832 $ (1,150) $ — |
COMPREHENSIVE EARNINGS (LOSS) (
COMPREHENSIVE EARNINGS (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
COMPREHENSIVE EARNINGS (LOSS) | |
Schedule of accumulated other comprehensive earnings (loss): | Accumulated Foreign Foreign Postretirement Other Currency Currency Commodity and Pension Comprehensive Translation Investments Derivatives Derivatives Benefits Earnings (Loss) Balance at December 31, 2015 $ (21,644) $ (605) $ (1,675) $ 173 $ 6,387 $ (17,364) Other comprehensive earnings (loss) before reclassifications (3,816) (95) 325 1,481 (466) (2,571) Reclassifications from accumulated other comprehensive loss — 3 1,274 (540) (1,048) (311) Other comprehensive earnings (loss) net of tax (3,816) (92) 1,599 941 (1,514) (2,882) Balance at December 31, 2016 $ (25,460) $ (697) $ (76) $ 1,114 $ 4,873 $ (20,246) Other comprehensive earnings (loss) before reclassifications 1,198 (192) 152 (1,050) (651) (543) Reclassifications from accumulated other comprehensive loss — — (25) (44) (933) (1,002) Other comprehensive earnings (loss) net of tax 1,198 (192) 127 (1,094) (1,584) (1,545) Balance at December 31, 2017 $ (24,262) $ (889) $ 51 $ 20 $ 3,289 $ (21,791) The a |
Amount reclassified from accumulated other comprehensive income (loss) | Details about Accumulated Other Year to Date Ended Comprehensive Income Components December 31, 2017 December 31, 2016 Location of (Gain) Loss Recognized in Earnings Investments $ - $ 5 Other income, net Foreign currency derivatives (39) 1,997 Other income, net Commodity derivatives (68) (847) Product cost of goods sold Postretirement and pension benefits (746) (838) Selling, marketing and administrative expenses Postretirement and pension benefits (716) (804) Product cost of goods sold Total before tax (1,569) (487) Tax expense (benefit) 567 176 Net of tax $ (1,002) $ (311) |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS: | |
Schedule of changes in carrying amount of trademarks | 2017 2016 Original cost $ 193,767 $ 193,767 Accumulated impairment losses as of January 1 (18,743) (18,743) Balance at January 1 $ 175,024 $ 175,024 Current year impairment losses — — Balance at December 31 $ 175,024 $ 175,024 Accumulated impairment losses as of December 31 $ (18,743) $ (18,743) |
QUARTERLY FINANCIAL DATA (UNA33
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY FINANCIAL DATA (UNAUDITED): | |
Schedule of quarterly results | (Thousands of dollars except per share data) First Second Third Fourth Year 2017 Net product sales $ 103,425 $ 104,897 $ 182,173 $ 125,179 $ 515,674 Product gross margin 38,009 39,638 67,325 44,778 189,750 Net earnings attributable to Tootsie Roll Industries, Inc. 10,051 11,895 26,933 31,985 80,864 Net earnings attributable to Tootsie Roll Industries, Inc. per share 0.16 0.19 0.43 0.51 1.28 2016 Net product sales $ 103,362 $ 104,259 $ 185,473 $ 124,279 $ 517,373 Product gross margin 37,538 39,250 70,725 49,570 197,083 Net earnings attributable to Tootsie Roll Industries, Inc. 9,896 11,136 28,637 17,841 67,510 Net earnings attributable to Tootsie Roll Industries, Inc. per share 0.15 0.17 0.45 0.28 1.05 |
SIGNIFICANT ACCOUNTING POLICI34
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue recognition: | |||
Shipping and handling costs | $ 43,973 | $ 40,629 | $ 42,619 |
Cash and cash equivalents: | |||
Maximum original maturity period of temporary cash investments classified as cash equivalents | 3 months | ||
Investments: | |||
Marketable securities, maximum maturity period | 3 years | ||
Inventories: | |||
Inventories at cost, last-in, first-out (LIFO) method | $ 51,694 | 53,278 | |
Excess of current cost over LIFO cost of inventories | 18,825 | 17,574 | |
Foreign inventories at cost, first-in, first-out (FIFO) method | $ 4,423 | $ 4,253 |
SIGNIFICANT ACCOUNTING POLICI35
SIGNIFICANT ACCOUNTING POLICIES - Property (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, plant and equipment: | |||
Depreciation expense | $ 18,991 | $ 19,627 | $ 20,388 |
Carrying value of long-lived assets: | |||
Impairment charges of long-lived assets | $ 2,371 | ||
Buildings | Minimum | |||
Property, plant and equipment: | |||
Useful lives | 20 years | ||
Buildings | Maximum | |||
Property, plant and equipment: | |||
Useful lives | 35 years | ||
Machinery and equipment | Minimum | |||
Property, plant and equipment: | |||
Useful lives | 5 years | ||
Machinery and equipment | Maximum | |||
Property, plant and equipment: | |||
Useful lives | 20 years | ||
Selling, Marketing, and Administrative Expense | |||
Carrying value of long-lived assets: | |||
Impairment charges of long-lived assets | $ 2,371 | $ 0 | $ 0 |
SIGNIFICANT ACCOUNTING POLICI36
SIGNIFICANT ACCOUNTING POLICIES - Benefits and Investment (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | |
SIGNIFICANT ACCOUNTING POLICIES | |||
Premium paid for split dollar life insurance agreements | $ 0 | $ 0 | $ 0 |
Agreements terminated | item | 0 | 0 | |
Amount received on termination of certain split dollar agreements | $ 7,591 |
SIGNIFICANT ACCOUNTING POLICI37
SIGNIFICANT ACCOUNTING POLICIES - Invest, VEBA, NP (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
VEBA trust | |||||
Contribution by entity to VEBA trust | $ 20,024 | $ 0 | |||
Cash and cash equivalents held by VEBA trust | 96,314 | $ 96,314 | 119,145 | $ 126,145 | $ 100,108 |
Goodwill and indefinite-lived intangible assets: | |||||
Impairments of intangibles | 0 | 0 | $ 0 | ||
VEBA Trust | Level 1 | |||||
VEBA trust | |||||
Cash and cash equivalents held by VEBA trust | $ 19,713 | $ 19,713 | $ 3,027 |
SIGNIFICANT ACCOUNTING POLICI38
SIGNIFICANT ACCOUNTING POLICIES - EPS (Details) | 12 Months Ended |
Dec. 31, 2017item | |
Common Stock | |
Earnings per share: | |
Voting right per share (in votes per share) | 1 |
Class B Common Stock | |
Earnings per share: | |
Voting right per share (in votes per share) | 10 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ACCRUED LIABILITIES | ||
Compensation | $ 10,107 | $ 9,840 |
Other employee benefits | 7,659 | 7,012 |
Taxes, other than income | 3,210 | 3,004 |
Advertising and promotions | 18,834 | 21,421 |
Other | 5,347 | 5,023 |
Total accrued liabilities | $ 45,157 | $ 46,300 |
INDUSTRIAL DEVELOPMENT BONDS (D
INDUSTRIAL DEVELOPMENT BONDS (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
INDUSTRIAL DEVELOPMENT BONDS | ||
Industrial development bonds, average floating interest rate (as a percent) | 1.00% | 0.50% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Domestic and foreign components of pretax income | |||||
Domestic | $ 76,042,000 | $ 87,016,000 | $ 82,276,000 | ||
Foreign | 8,519,000 | 10,896,000 | 10,302,000 | ||
Earnings before income taxes | 84,561,000 | 97,912,000 | 92,578,000 | ||
Current: | |||||
Federal | 6,019,000 | 28,484,000 | 26,259,000 | ||
Foreign | 86,000 | (596,000) | |||
State | 369,000 | 1,954,000 | 785,000 | ||
Total current | 6,388,000 | 30,524,000 | 26,448,000 | ||
Deferred: | |||||
Federal | (7,191,000) | (2,547,000) | (1,189,000) | ||
Foreign | 3,425,000 | 3,323,000 | 2,106,000 | ||
State | 1,285,000 | (707,000) | (914,000) | ||
Total deferred | (2,481,000) | 69,000 | 3,000 | ||
Total provision for income taxes | 3,907,000 | 30,593,000 | $ 26,451,000 | ||
Deferred tax assets: | |||||
Accrued customer promotions | $ 1,583,000 | 1,583,000 | 3,194,000 | ||
Deferred compensation | 15,403,000 | 15,403,000 | 26,509,000 | ||
Postretirement benefits | 3,352,000 | 3,352,000 | 4,732,000 | ||
Other accrued expenses | 4,200,000 | 4,200,000 | 6,543,000 | ||
Foreign subsidiary tax loss carry forward | 7,270,000 | 7,270,000 | 8,452,000 | ||
Tax credit carry forward | 3,435,000 | 3,435,000 | 2,514,000 | ||
Deferred tax assets, gross | 35,243,000 | 35,243,000 | 51,944,000 | ||
Valuation allowance | (3,269,000) | (3,269,000) | (2,317,000) | ||
Total deferred tax assets | 31,974,000 | 31,974,000 | 49,627,000 | ||
Deferred tax liabilities: | |||||
Depreciation | 18,791,000 | 18,791,000 | 28,049,000 | ||
Deductible goodwill and trademarks | 34,593,000 | 34,593,000 | 45,733,000 | ||
Accrued export company commissions | 4,189,000 | 4,189,000 | 6,044,000 | ||
Employee benefit plans | 4,662,000 | 4,662,000 | 928,000 | ||
Inventory reserves | 2,147,000 | 2,147,000 | 3,529,000 | ||
Prepaid insurance | 769,000 | 769,000 | 1,015,000 | ||
Other prepaid expenses | 1,196,000 | 1,196,000 | |||
Deferred foreign exchange gain | 405,000 | 405,000 | 436,000 | ||
Unrealized capital gain | 977,000 | 977,000 | 733,000 | ||
Deferred gain on sale of real estate | 5,278,000 | 5,278,000 | 8,093,000 | ||
Total deferred tax liabilities | 73,007,000 | 73,007,000 | 94,560,000 | ||
Net deferred tax liability | 41,033,000 | 41,033,000 | $ 44,933,000 | ||
Benefits related to foreign subsidiary tax credit carryforwards | 288,000 | 288,000 | |||
State tax credit carry-forwards expiring in 2018 | 104,000 | 104,000 | |||
State tax credit carry-forwards expiring in 2019 | 853,000 | 853,000 | |||
State tax credit carry-forwards expiring in 2020 | 674,000 | 674,000 | |||
State tax credit carry-forwards expiring in 2021 | 609,000 | 609,000 | |||
State tax credit carry-forwards expiring in 2029 | 220,000 | 220,000 | |||
State tax credit carry-forwards expiring in 2030 | 222,000 | 222,000 | |||
State tax credit carry-forwards expiring in 2031 | 234,000 | 234,000 | |||
State tax credit carry-forwards expiring in 2032 | 231,000 | $ 231,000 | |||
U.S. statutory rate (as a percent) | 35.00% | 35.00% | 35.00% | ||
Favorable adjustment | $ 20,318,000 | $ 20,318,000 | |||
Foreign earnings subject to toll | $ 0 | ||||
Forecast | |||||
Deferred tax liabilities: | |||||
U.S. statutory rate (as a percent) | 21.00% |
INCOME TAXES - Income tax rates
INCOME TAXES - Income tax rates (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective income tax rate differs from the statutory rate | |||
U.S. statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
State income taxes, net (as a percent) | 1.60% | 1.00% | 1.10% |
Exempt municipal bond interest (as a percent) | (0.10%) | (0.10%) | (0.10%) |
Foreign tax rates (as a percent) | 0.50% | (0.40%) | (1.30%) |
Qualified domestic production activities deduction (as a percent) | (0.80%) | (2.70%) | (2.60%) |
Tax credits receivable (as a percent) | (1.40%) | (0.50%) | (1.20%) |
Adjustment of deferred tax balances (as a percent) | (24.20%) | (0.50%) | 0.20% |
Reserve for uncertain tax benefits (as a percent) | (0.30%) | (2.10%) | |
Worthless stock deduction (as a percent) | (3.80%) | ||
Other, net (as a percent) | (1.90%) | (0.60%) | (0.40%) |
Effective income tax rate (as a percent) | 4.60% | 31.20% | 28.60% |
Dividends received deduction for certain qualified dividends foreign subsidiaries (as a percent) | 100.00% | ||
Portion of unrecognized tax benefits that, if recognized, would favorably affect annual effective income tax rate | $ 2,475 | $ 2,761 | |
Interest and penalties included in liability for uncertain tax positions | 475 | 439 | |
Reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits | |||
Unrecognized tax benefits at the beginning of the period | 4,746 | 4,680 | $ 6,993 |
Increases in tax positions for the current year | 394 | 803 | 812 |
Reductions in tax positions for lapse of statute of limitations | (793) | (718) | (865) |
Reductions in tax positions relating to settlements with taxing authorities | (27) | (772) | |
Increases in prior period unrecognized tax benefits | 8 | ||
Decreases in prior period unrecognized tax benefits | (5) | (1,488) | |
Unrecognized tax benefits at the end of the period | 4,342 | $ 4,746 | $ 4,680 |
Canada | |||
Effective income tax rate differs from the statutory rate | |||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2028 | 3,075 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2031 | 665 | ||
Spain | |||
Effective income tax rate differs from the statutory rate | |||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2026 | 301 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2027 | 64 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2028 | 192 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2029 | 109 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2030 | 331 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2031 | 441 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2032 | 332 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2033 | 134 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2034 | 464 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2035 | 670 | ||
Mexico | |||
Effective income tax rate differs from the statutory rate | |||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2036 | $ 492 |
SHARE CAPITAL AND CAPITAL IN 43
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in share capital and capital in excess of par value | ||||||
Balance at the beginning of the period | $ 711,538 | |||||
Balance at the end of the period | $ 733,804 | $ 711,538 | ||||
Treasury stock, shares | 85 | 83 | ||||
Total Number of Shares Purchased | 921 | 818 | 1,047 | |||
Average Price Paid Per Share (in dollars per share) | $ 37.01 | $ 35.51 | $ 31.47 | |||
Stock dividend rate (as a percent) | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | |
Common Stock. | ||||||
Changes in share capital and capital in excess of par value | ||||||
Balance at the beginning of the period | $ 26,181 | $ 25,960 | $ 25,892 | |||
Balance at the beginning of the period (in shares) | 37,701 | 37,382 | 37,285 | |||
Issuance of 3% stock dividend | $ 781 | $ 772 | $ 773 | |||
Issuance of 3% stock dividend (in shares) | 1,124 | 1,111 | 1,112 | |||
Conversion of Class B common shares to common shares | $ 39 | $ 18 | $ 22 | |||
Conversion of Class B common shares to common shares (in shares) | 56 | 26 | 32 | |||
Purchase and retirement of common shares | $ (640) | $ (569) | $ (727) | |||
Purchase and retirement of common shares (in shares) | (921) | (818) | (1,047) | |||
Balance at the end of the period | $ 26,361 | $ 26,181 | $ 25,960 | |||
Balance at the end of the period (in shares) | 37,960 | 37,701 | 37,382 | |||
Treasury Stock | ||||||
Changes in share capital and capital in excess of par value | ||||||
Balance at the beginning of the period | $ (1,992) | $ (1,992) | $ (1,992) | |||
Issuance of 3% stock dividend (in shares) | 2 | 3 | 2 | |||
Balance at the end of the period | $ (1,992) | $ (1,992) | $ (1,992) | |||
Treasury stock, shares | 85 | 83 | 80 | 78 | ||
Capital in Excess of Par Value | ||||||
Changes in share capital and capital in excess of par value | ||||||
Balance at the beginning of the period | $ 646,768 | $ 622,882 | $ 599,186 | |||
Issuance of 3% stock dividend | 43,477 | 52,410 | 55,982 | |||
Purchase and retirement of common shares | (33,493) | (28,524) | (32,286) | |||
Balance at the end of the period | 656,752 | 646,768 | 622,882 | |||
Class B Common Stock | Common Stock. | ||||||
Changes in share capital and capital in excess of par value | ||||||
Balance at the beginning of the period | $ 16,820 | $ 16,348 | $ 15,894 | |||
Balance at the beginning of the period (in shares) | 24,221 | 23,542 | 22,887 | |||
Issuance of 3% stock dividend | $ 504 | $ 490 | $ 476 | |||
Issuance of 3% stock dividend (in shares) | 726 | 705 | 687 | |||
Conversion of Class B common shares to common shares | $ (39) | $ (18) | $ (22) | |||
Conversion of Class B common shares to common shares (in shares) | (56) | (26) | (32) | |||
Balance at the end of the period | $ 17,285 | $ 16,820 | $ 16,348 | |||
Balance at the end of the period (in shares) | 24,891 | 24,221 | 23,542 |
OTHER INCOME, NET (Details)
OTHER INCOME, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OTHER INCOME, NET | |||
Interest and dividend income | $ 2,851 | $ 2,130 | $ 1,421 |
Gains on trading securities relating to deferred compensation plans | 9,977 | 4,275 | 1,450 |
Interest expense | (144) | (105) | (76) |
Foreign exchange gains (losses) | 259 | (955) | (1,427) |
Capital gains (losses) | 25 | 7 | 2 |
Miscellaneous, net | 177 | 146 | 126 |
Total other income, net | $ 13,145 | $ 5,498 | $ 1,496 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - Pension Plan [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Credited service period | 1 year | ||
Pension expense | $ 3,087 | $ 3,126 | $ 3,100 |
Employer contributions to profit sharing and retirement savings-investment plan | $ 2,512 | $ 2,493 | $ 2,533 |
EMPLOYEE BENEFIT PLANS - Multi-
EMPLOYEE BENEFIT PLANS - Multi-employer plans (Details) - Multi-employer defined benefit pension plan - USD ($) $ in Thousands | Jun. 12, 2012 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2016 |
Multiemployer Plans [Line Items] | |||||
Percentage of funded status | 57.01% | ||||
Employer contributions to multi-employer defined benefit pension plans | $ 2,603 | $ 2,515 | $ 2,574 | ||
Insolvent period | 20 years | ||||
Estimated liability upon withdrawal from plan | $ 82,200 | 72,700 | $ 61,000 | ||
Percentage of annual compounded surcharge for rehabilitation | 5.00% | ||||
Percentage of interim surcharge | 5.00% | ||||
Pension expense | $ 2,617 | 2,541 | |||
Increase in surcharge | $ 656 | $ 542 |
EMPLOYEE BENEFIT PLANS - Deferr
EMPLOYEE BENEFIT PLANS - Deferred compensation (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Deferred compensation | ||
Number of deferred compensation plans | item | 3 | |
Trading securities | $ | $ 60,520 | $ 67,995 |
EMPLOYEE BENEFIT PLANS - Postre
EMPLOYEE BENEFIT PLANS - Postretirement (Details) - Postretirement benefit plans - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Postretirement benefit plan disclosure | |||
Assumed ultimate health care cost trend rate (as a percent) | 3.00% | ||
Accumulated benefit obligation after plan amendment | $ 13,497 | $ 12,128 | |
Amounts recognized in accumulated other comprehensive loss (pre-tax) | |||
Prior service credit | (5,519) | ||
Net actuarial gain | (713) | ||
Net amount recognized in accumulated other comprehensive loss | (6,232) | ||
Estimated amount to be amortized from accumulated other comprehensive loss (gain) into net periodic benefit cost during next fiscal year | |||
Actuarial gain | 97 | ||
Prior service credit | 1,226 | ||
Changes in the accumulated postretirement benefit obligation | |||
Benefit obligation, beginning of the period | 12,128 | 11,400 | |
Service cost | 323 | 331 | $ 441 |
Interest cost | 468 | 462 | 465 |
Actuarial (gain)/loss | 897 | 235 | |
Benefits paid | (319) | (300) | |
Benefit obligation, end of the period | 13,497 | 12,128 | 11,400 |
Net periodic postretirement benefit cost | |||
Service cost benefits attributed to service during the period | 323 | 331 | 441 |
Interest cost on the accumulated postretirement benefit obligation | 468 | 462 | 465 |
Net amortization | (1,462) | (1,642) | (1,451) |
Net periodic postretirement benefit cost (income) | $ (671) | $ (849) | $ (545) |
EMPLOYEE BENEFIT PLANS - Expect
EMPLOYEE BENEFIT PLANS - Expected future benefit payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Estimated future benefit payments | |
2,018 | $ 603 |
2,019 | 525 |
2,020 | 556 |
2,021 | 598 |
2,022 | 632 |
2023 through 2027 | $ 3,647 |
COMMITMENTS (Details)
COMMITMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
COMMITMENTS | |||
Rental expense | $ 785 | $ 703 | $ 728 |
SEGMENT AND GEOGRAPHIC INFORM51
SEGMENT AND GEOGRAPHIC INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Net product sales: | $ 125,179 | $ 182,173 | $ 104,897 | $ 103,425 | $ 124,279 | $ 185,473 | $ 104,259 | $ 103,362 | $ 515,674 | $ 517,373 | $ 536,692 |
Long-lived assets: | 178,972 | 180,905 | 178,972 | 180,905 | 184,586 | ||||||
United States | |||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Net product sales: | 472,222 | 475,055 | 492,450 | ||||||||
Long-lived assets: | 145,210 | 147,296 | 145,210 | 147,296 | 149,144 | ||||||
Canada | |||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Long-lived assets: | 30,823 | 29,806 | 30,823 | 29,806 | 31,408 | ||||||
Canada, Mexico, and Other | |||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Net product sales: | 43,452 | 42,318 | 44,242 | ||||||||
Mexico and Other | |||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Long-lived assets: | $ 2,939 | $ 3,803 | $ 2,939 | $ 3,803 | $ 4,034 |
SEGMENT AND GEOGRAPHIC INFORM52
SEGMENT AND GEOGRAPHIC INFORMATION - Concentration (Details) - Net product sales - A major customer | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Wal-Mart | |||
Concentration of Risk | |||
Revenues from a major customer (as a percent) | 24.00% | 23.30% | 23.70% |
McLane | |||
Concentration of Risk | |||
Revenues from a major customer (as a percent) | 16.90% | 16.30% | 16.70% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair value measurements | ||
Available for sale securities | $ 171,596 | $ 164,183 |
Trading securities | 60,520 | 67,995 |
Fair value measured on a recurring basis | ||
Fair value measurements | ||
Cash and cash equivalents | 96,314 | 119,145 |
Available for sale securities | 171,596 | 164,183 |
Trading securities | 60,520 | 67,995 |
Total assets measured at fair value | 328,541 | 352,950 |
Fair value measured on a recurring basis | Foreign currency forward contracts | ||
Fair value measurements | ||
Derivative instruments, net | 79 | (119) |
Fair value measured on a recurring basis | Commodity futures contracts | ||
Fair value measurements | ||
Derivative instruments, net | 32 | 1,746 |
Fair value measured on a recurring basis | Level 1 | ||
Fair value measurements | ||
Cash and cash equivalents | 96,314 | 119,145 |
Available for sale securities | 1,200 | 2,419 |
Trading securities | 60,520 | 67,995 |
Total assets measured at fair value | 158,066 | 191,305 |
Fair value measured on a recurring basis | Level 1 | Commodity futures contracts | ||
Fair value measurements | ||
Derivative instruments, net | 32 | 1,746 |
Fair value measured on a recurring basis | Level 2 | ||
Fair value measurements | ||
Available for sale securities | 170,396 | 161,764 |
Total assets measured at fair value | 170,475 | 161,645 |
Fair value measured on a recurring basis | Level 2 | Foreign currency forward contracts | ||
Fair value measurements | ||
Derivative instruments, net | $ 79 | $ (119) |
FAIR VALUE MEASUREMENTS AFS (De
FAIR VALUE MEASUREMENTS AFS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Available for Sale: | ||
Amortized Cost | $ 172,991 | $ 165,278 |
Fair Value | 171,596 | 164,183 |
Unrealized Gains | 16 | 15 |
Unrealized Losses | (1,411) | (1,110) |
Municipal bonds | ||
Available for Sale: | ||
Amortized Cost | 32,411 | 16,046 |
Fair Value | 31,484 | 15,206 |
Unrealized Losses | (927) | (840) |
Variable rate demand notes | ||
Available for Sale: | ||
Amortized Cost | 19,700 | |
Fair Value | 19,700 | |
Corporate bonds | ||
Available for Sale: | ||
Amortized Cost | 134,143 | 122,568 |
Fair Value | 133,684 | 122,298 |
Unrealized Losses | (459) | (270) |
Government securities | ||
Available for Sale: | ||
Amortized Cost | 1,192 | 2,411 |
Fair Value | 1,208 | 2,426 |
Unrealized Gains | 16 | 15 |
Certificates of deposit | ||
Available for Sale: | ||
Amortized Cost | 5,245 | 4,553 |
Fair Value | 5,220 | $ 4,553 |
Unrealized Losses | $ (25) |
FAIR VALUE MEASUREMENTS - Recur
FAIR VALUE MEASUREMENTS - Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair value on a recurring basis | ||
Industrial revenue development bonds, carrying amount, approximates fair value | $ 7,500 | $ 7,500 |
Cost Basis | Level 2 | ||
Fair value on a recurring basis | ||
Industrial revenue development bonds, carrying amount, approximates fair value | 7,500 | 7,500 |
Estimated Fair Value | Level 2 | ||
Fair value on a recurring basis | ||
Industrial revenue development bonds, carrying amount, approximates fair value | $ 7,500 | $ 7,500 |
DERIVATIVE INSTRUMENTS AND HE56
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative contracts | ||||
Assets | $ 363 | $ 1,932 | ||
Liabilities | (252) | (305) | ||
Derivatives designated as hedging instruments: | Foreign currency forward contracts | ||||
Derivative contracts | ||||
Notional Amounts | 919 | 2,357 | ||
Assets | 79 | |||
Liabilities | (119) | |||
Derivatives designated as hedging instruments: | Commodity futures contracts | ||||
Derivative contracts | ||||
Notional Amounts | 13,840 | 10,811 | ||
Assets | 284 | 1,932 | ||
Liabilities | $ (252) | $ (186) | ||
Forecast | ||||
Derivative contracts | ||||
Gain (loss) to be reclassified | $ (52) | $ 84 |
DERIVATIVE INSTRUMENTS AND HE57
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - OCI (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Effect of derivative instruments on earnings | ||
Gain (Loss) Recognized in OCI | $ (1,410) | $ 2,832 |
Reclassified from Accumulated OCI into Earnings | ||
Effect of derivative instruments on earnings | ||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | 107 | (1,150) |
Foreign currency forward contracts | ||
Effect of derivative instruments on earnings | ||
Gain (Loss) Recognized in OCI | 236 | 511 |
Foreign currency forward contracts | Reclassified from Accumulated OCI into Earnings | ||
Effect of derivative instruments on earnings | ||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | 39 | (1,997) |
Commodity futures contracts | ||
Effect of derivative instruments on earnings | ||
Gain (Loss) Recognized in OCI | (1,646) | 2,321 |
Commodity futures contracts | Reclassified from Accumulated OCI into Earnings | ||
Effect of derivative instruments on earnings | ||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | $ 68 | $ 847 |
COMPREHENSIVE EARNINGS (LOSS)58
COMPREHENSIVE EARNINGS (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | $ 711,364 | |
Balance at the end of the period | 733,840 | $ 711,364 |
Foreign Currency Derivatives | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (76) | (1,675) |
Other comprehensive earnings (loss) before reclassifications | 152 | 325 |
Reclassifications from accumulated other comprehensive loss | (25) | 1,274 |
Other comprehensive earnings (loss) net of tax | 127 | 1,599 |
Balance at the end of the period | 51 | (76) |
Investments | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (697) | (605) |
Other comprehensive earnings (loss) before reclassifications | (192) | (95) |
Reclassifications from accumulated other comprehensive loss | 3 | |
Other comprehensive earnings (loss) net of tax | (192) | (92) |
Balance at the end of the period | (889) | (697) |
Postretirement and Pension Benefits | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | 4,873 | 6,387 |
Other comprehensive earnings (loss) before reclassifications | (651) | (466) |
Reclassifications from accumulated other comprehensive loss | (933) | (1,048) |
Other comprehensive earnings (loss) net of tax | (1,584) | (1,514) |
Balance at the end of the period | 3,289 | 4,873 |
Foreign Currency Translation Adjustment | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (25,460) | (21,644) |
Other comprehensive earnings (loss) before reclassifications | 1,198 | (3,816) |
Other comprehensive earnings (loss) net of tax | 1,198 | (3,816) |
Balance at the end of the period | (24,262) | (25,460) |
Commodity Derivatives | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | 1,114 | 173 |
Other comprehensive earnings (loss) before reclassifications | (1,050) | 1,481 |
Reclassifications from accumulated other comprehensive loss | (44) | (540) |
Other comprehensive earnings (loss) net of tax | (1,094) | 941 |
Balance at the end of the period | 20 | 1,114 |
Accumulated Other Comprehensive Earnings ( Loss ) | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (20,246) | (17,364) |
Other comprehensive earnings (loss) before reclassifications | (543) | (2,571) |
Reclassifications from accumulated other comprehensive loss | (1,002) | (311) |
Other comprehensive earnings (loss) net of tax | (1,545) | (2,882) |
Balance at the end of the period | $ (21,791) | $ (20,246) |
COMPREHENSIVE EARNINGS (LOSS) -
COMPREHENSIVE EARNINGS (LOSS) - Reclassification from AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | $ (13,145) | $ (5,498) | $ (1,496) |
Product cost of goods sold | 325,924 | 320,290 | 340,090 |
Selling, marketing and administrative expenses | 120,977 | 107,377 | 108,051 |
Total before tax | (84,561) | (97,912) | (92,578) |
Tax (expense) benefit | 3,907 | 30,593 | 26,451 |
Net earnings | (80,654) | (67,319) | $ (66,127) |
Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Total before tax | (1,569) | (487) | |
Tax (expense) benefit | 567 | 176 | |
Net earnings | (1,002) | (311) | |
Foreign Currency Derivatives | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | (39) | 1,997 | |
Investments | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | 5 | ||
Postretirement and Pension Benefits | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Product cost of goods sold | (716) | (804) | |
Selling, marketing and administrative expenses | (746) | (838) | |
Commodity Derivatives | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Product cost of goods sold | $ (68) | $ (847) |
GOODWILL AND INTANGIBLE ASSET60
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in carrying amount of trademarks | ||
Accumulated impairment losses of goodwill | $ 0 | |
Trademarks | ||
Changes in carrying amount of trademarks | ||
Original cost | 193,767 | $ 193,767 |
Accumulated impairment losses, balance at the beginning of the period | (18,743) | |
Carrying amount, balance at the beginning of the period | 175,024 | 175,024 |
Current year impairment losses | ||
Carrying amount, balance at the end of the period | 175,024 | 175,024 |
Accumulated impairment losses, balance at the end of the period | $ (18,743) | $ (18,743) |
QUARTERLY FINANCIAL DATA (UNA61
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
QUARTERLY FINANCIAL DATA (UNAUDITED): | |||||||||||
Net product sales | $ 125,179 | $ 182,173 | $ 104,897 | $ 103,425 | $ 124,279 | $ 185,473 | $ 104,259 | $ 103,362 | $ 515,674 | $ 517,373 | $ 536,692 |
Product gross margin | 44,778 | 67,325 | 39,638 | 38,009 | 49,570 | 70,725 | 39,250 | 37,538 | 189,750 | 197,083 | 196,602 |
Net earnings attributable to Tootsie Roll Industries, Inc. | $ 31,985 | $ 26,933 | $ 11,895 | $ 10,051 | $ 17,841 | $ 28,637 | $ 11,136 | $ 9,896 | $ 80,864 | $ 67,510 | $ 66,089 |
Net earnings attributable to Tootsie Roll Industries, Inc. per share (in dollars per share) | $ 0.51 | $ 0.43 | $ 0.19 | $ 0.16 | $ 0.28 | $ 0.45 | $ 0.17 | $ 0.15 | $ 1.28 | $ 1.05 | $ 1.02 |
Stock dividend rate (as a percent) | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | ||||||
Favorable adjustment, per share | $ 0.32 | $ 0.32 | |||||||||
Favorable adjustment | $ 20,318 | $ 20,318 |
SCHEDULE II - VALUATION AND Q62
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Description | |||
Balance at beginning of year | $ 4,201 | $ 4,302 | $ 4,446 |
Additions charged to expense | 10,247 | 9,321 | 9,544 |
Deductions | 9,258 | 9,422 | 9,688 |
Balance at End of Year | 5,190 | 4,201 | 4,302 |
Reserve for bad debts | |||
Description | |||
Balance at beginning of year | 1,225 | 1,410 | 1,300 |
Additions charged to expense | 27 | 267 | |
Reductions credited to expense | (166) | ||
Deductions | 55 | 19 | 157 |
Balance at End of Year | 1,197 | 1,225 | 1,410 |
Reserve for cash discounts | |||
Description | |||
Balance at beginning of year | 659 | 815 | 668 |
Additions charged to expense | 9,268 | 9,247 | 9,678 |
Deductions | 9,203 | 9,403 | 9,531 |
Balance at End of Year | 724 | 659 | 815 |
Deferred tax asset valuation | |||
Description | |||
Balance at beginning of year | 2,317 | 2,077 | 2,478 |
Additions charged to expense | 952 | 240 | |
Reductions credited to expense | (401) | ||
Balance at End of Year | $ 3,269 | $ 2,317 | $ 2,077 |