Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 30, 2019 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity File Number | 1-1361 | ||
Entity Registrant Name | TOOTSIE ROLL INDUSTRIES, INC | ||
Entity Incorporation, State or Country Code | VA | ||
Entity Tax Identification Number | 22-1318955 | ||
Entity Address, Address Line One | 7401 South Cicero Avenue | ||
Entity Address, City or Town | Chicago | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60629 | ||
City Area Code | 773 | ||
Local Phone Number | 838-3400 | ||
Title of 12(b) Security | Common Stock — Par Value $.69-4/9 Per Share | ||
Title of 12(g) Security | Class B Common Stock — Par Value $.69-4/9 Per Share | ||
Trading Symbol | TR | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Central Index Key | 0000098677 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Public Float | $ 651,380,000 | ||
Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 38,788,652 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 26,253,049 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | $ 527,113 | $ 518,920 | $ 519,289 |
Costs | 330,097 | 330,747 | 327,383 |
Gross Margin | 197,016 | 188,173 | 191,906 |
Selling, marketing and administrative expenses | 127,802 | 117,691 | 121,484 |
Earnings from operations | 69,214 | 70,482 | 70,422 |
Other income, net | 16,190 | 2,724 | 14,139 |
Earnings before income taxes | 85,404 | 73,206 | 84,561 |
Provision for income taxes | 20,565 | 16,401 | 3,907 |
Net earnings | 64,839 | 56,805 | 80,654 |
Less: net earnings (loss) attributable to noncontrolling interests | (81) | (88) | (210) |
Net earnings attributable to Tootsie Roll Industries, Inc. | $ 64,920 | $ 56,893 | $ 80,864 |
Net earnings attributable to Tootsie Roll Industries, Inc. per share (in dollars per share) | $ 0.99 | $ 0.86 | $ 1.21 |
Average number of shares outstanding (in shares) | 65,474 | 66,130 | 66,962 |
Retained earnings at beginning of period | $ 33,767 | $ 57,225 | $ 43,833 |
Net earnings attributable to Tootsie Roll Industries, Inc. | 64,920 | 56,893 | 80,864 |
Adopted ASU's (See Note 1) | 2,726 | ||
Cash dividends | (23,371) | (22,929) | (22,548) |
Stock dividends | (34,507) | (60,148) | (44,924) |
Retained earnings at end of period | 40,809 | 33,767 | 57,225 |
Product | |||
Revenue | 523,616 | 515,251 | 515,674 |
Costs | 329,102 | 329,880 | 326,411 |
Gross Margin | 194,514 | 185,371 | 189,263 |
Rental and Royalty | |||
Revenue | 3,497 | 3,669 | 3,615 |
Costs | 995 | 867 | 972 |
Gross Margin | $ 2,502 | $ 2,802 | $ 2,643 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS | |||
Net earnings | $ 64,839 | $ 56,805 | $ 80,654 |
Other comprehensive income (loss), before tax: | |||
Foreign currency translation adjustments | 791 | 103 | 1,198 |
Pension and postretirement reclassification adjustments: | |||
Unrealized gains (losses) for the period on postretirement and pension benefits | (1,230) | 1,558 | (1,009) |
Less: reclassification adjustment for (gains) losses to net earnings | (1,522) | (1,324) | (1,462) |
Unrealized gains (losses) on postretirement and pension benefits | (2,752) | 234 | (2,471) |
Investments: | |||
Unrealized gains (losses) for the period on investments | 3,130 | (606) | (300) |
Less: reclassification adjustment for (gains) losses to net earnings | 34 | ||
Unrealized gains (losses) on investments | 3,164 | (606) | (300) |
Derivatives: | |||
Unrealized gains (losses) for the period on derivatives | 451 | (2,734) | (1,410) |
Less: reclassification adjustment for (gains) losses to net earnings | 677 | 1,630 | (107) |
Unrealized gains (losses) on derivatives | 1,128 | (1,104) | (1,517) |
Total other comprehensive income (loss), before tax | 2,331 | (1,373) | (3,090) |
Income tax benefit (expense) related to items of other comprehensive income | (354) | 349 | 1,545 |
Total comprehensive earnings | 66,816 | 55,781 | 79,109 |
Comprehensive earnings (loss) attributable to noncontrolling interests | (81) | (88) | (210) |
Total comprehensive earnings attributable to Tootsie Roll Industries, Inc. | $ 66,897 | $ 55,869 | $ 79,319 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 138,960 | $ 110,899 |
Restricted cash | 380 | 388 |
Investments | 100,444 | 75,140 |
Accounts receivable trade, less allowances of $1,949 and $1,820 | 45,044 | 49,777 |
Other receivables | 3,418 | 2,941 |
Inventories: | ||
Finished goods and work-in-process | 35,909 | 32,159 |
Raw materials and supplies | 23,179 | 22,365 |
Prepaid expenses | 5,996 | 10,377 |
Total current assets | 353,330 | 304,046 |
PROPERTY, PLANT AND EQUIPMENT, at cost: | ||
Land | 21,740 | 21,726 |
Buildings | 122,843 | 121,780 |
Machinery and equipment | 416,625 | 401,037 |
Construction in progress | 4,427 | 3,408 |
Operating lease right-of-use assets | 1,580 | |
Property, plant and equipment, gross | 567,215 | 547,951 |
Less - accumulated depreciation | 378,760 | 361,850 |
Net property, plant and equipment | 188,455 | 186,101 |
OTHER ASSETS: | ||
Goodwill | 73,237 | 73,237 |
Trademarks | 175,024 | 175,024 |
Investments | 153,031 | 170,409 |
Split dollar officer life insurance | 26,042 | 26,042 |
Prepaid expenses and other assets | 8,056 | 11,980 |
Deferred income taxes | 689 | 522 |
Total other assets | 436,079 | 457,214 |
Total assets | 977,864 | 947,361 |
CURRENT LIABILITIES: | ||
Accounts payable | 12,720 | 11,817 |
Bank loans | 747 | 373 |
Dividends payable | 5,861 | 5,772 |
Accrued liabilities | 41,611 | 42,849 |
Postretirement health care benefits | 598 | 580 |
Operating lease liabilities | 1,062 | |
Deferred compensation | 16,945 | |
Total current liabilities | 79,544 | 61,391 |
NONCURRENT LIABILITIES: | ||
Deferred income taxes | 47,295 | 43,941 |
Postretirement health care benefits | 13,145 | 11,871 |
Industrial development bonds | 7,500 | 7,500 |
Liability for uncertain tax positions | 4,240 | 3,816 |
Operating lease liabilities | 518 | |
Deferred compensation and other liabilities | 65,973 | 68,345 |
Total noncurrent liabilities | 138,671 | 135,473 |
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | ||
Capital in excess of par value | 696,059 | 696,535 |
Retained earnings | 40,809 | 33,767 |
Accumulated other comprehensive loss | (20,245) | (22,222) |
Treasury stock (at cost) - 90 shares and 88 shares, respectively | (1,992) | (1,992) |
Total Tootsie Roll Industries, Inc. shareholders' equity | 759,854 | 750,622 |
Noncontrolling interests | (205) | (125) |
Total equity | 759,649 | 750,497 |
Total liabilities and shareholders' equity | 977,864 | 947,361 |
Common Stock | ||
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | ||
Common stock, $.69-4/9 par value - 120,000 shares authorized - 38,836 and 38,544, respectively, issued.Class B common stock, $.69-4/9 par value - 40,000 shares authorized - 26,287 and 25,584, respectively, issued | 26,969 | 26,767 |
Class B Common Stock | ||
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | ||
Common stock, $.69-4/9 par value - 120,000 shares authorized - 38,836 and 38,544, respectively, issued.Class B common stock, $.69-4/9 par value - 40,000 shares authorized - 26,287 and 25,584, respectively, issued | $ 18,254 | $ 17,767 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Trade accounts receivable, allowances | $ 1,949 | $ 1,820 |
Treasury stock, shares | 90,000 | 88,000 |
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 | 38,836 | 38,544 |
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 | 26,287 | 25,584 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net earnings | $ 64,839 | $ 56,805 | $ 80,654 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation | 18,779 | 18,669 | 18,991 |
Deferred income taxes | 2,832 | 2,063 | (2,337) |
Impairment of majority-owned foreign subsidiaries | 377 | 1,126 | 2,371 |
Amortization of marketable security premiums | 1,282 | 1,755 | 2,386 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 5,086 | (2,445) | (4,012) |
Other receivables | (313) | 2,220 | (3,146) |
Inventories | (4,383) | 303 | 1,558 |
Prepaid expenses and other assets | 4,362 | 9,489 | (22,052) |
Accounts payable and accrued liabilities | 1,080 | 1,648 | (557) |
Income taxes payable | 4,336 | 7,953 | (11,899) |
Postretirement health care benefits | (1,478) | (2,484) | (1,192) |
Deferred compensation and other liabilities | 3,422 | 3,827 | (17,792) |
Net cash provided by operating activities | 100,221 | 100,929 | 42,973 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Capital expenditures | (20,258) | (27,612) | (16,673) |
Purchases of trading securities | (3,427) | (4,378) | (5,089) |
Sales of trading securities | 795 | 1,255 | 22,396 |
Purchase of available for sale securities | (67,730) | (78,377) | (89,364) |
Sale and maturity of available for sale securities | 75,611 | 64,602 | 79,410 |
Net cash used in investing activities | (15,009) | (44,510) | (9,320) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Shares purchased and retired | (34,116) | (19,317) | (34,133) |
Dividends paid in cash | (23,460) | (22,978) | (22,621) |
Proceeds from bank loans | 3,582 | 2,491 | 2,162 |
Repayment of bank loans | (3,193) | (2,549) | (2,289) |
Net cash used in financing activities | (57,187) | (42,353) | (56,881) |
Effect of exchange rate changes on cash | 28 | 501 | 421 |
Increase (decrease) in cash and cash equivalents | 28,053 | 14,567 | (22,807) |
Cash, cash equivalents and restricted cash at beginning of year | 111,287 | 96,720 | 119,527 |
Cash, cash equivalents and restricted cash at end of year | 139,340 | 111,287 | 96,720 |
Supplemental cash flow information: | |||
Income taxes paid | 13,858 | 5,676 | 18,854 |
Interest paid | 121 | 112 | 68 |
Stock dividend issued | $ 70,557 | $ 60,538 | $ 69,739 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 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: The Company’s revenues, primarily net product sales, principally result from the sale of goods, reflect the consideration to which the Company expects to be entitled, generally based on customer purchase orders. The Company records revenue based on a five-step model in accordance with Accounting Standards Codification ("ASC") Topic 606 which became effective January, 1, 2018. Adjustments for estimated customer cash discounts upon payment, discounts for price adjustments, product returns, allowances, and certain advertising and promotional costs, including consumer coupons, are variable consideration and are recorded as a reduction of product sales revenue in the same period the related product sales are recorded. Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. A net product sale is recorded when the Company delivers the product to the customer, or in certain instances, the customer picks up the goods at the Company’s distribution center, and thereby obtains control of such product. Amounts billed and due from our customers are classified as accounts receivables trade on the balance sheet and require payment on a short-term basis. Accounts receivable are unsecured. Shipping and handling costs of $49,288, $49,527, and $44,082 in 2019, 2018 and 2017, respectively, are included in selling, marketing and administrative expenses. A minor amount of royalty income (less than 0.2% of our consolidated net sales) is also recognized from sales-based licensing arrangements, pursuant to which revenue is recognized as the third-party licensee sales occur. Rental income (less than 1% of our consolidated net sales) is not considered revenue from contracts from customers. Leases: The Company identifies leases by evaluating our contracts to determine if the contract conveys the right to use an identified asset for a stated period of time in exchange for consideration. The Company considers whether it can control the underlying asset and has the right to obtain substantially all of the economic benefits or outputs from the asset. Leases with terms greater than 12 months are classified as either operating or finance leases at the commencement date. For these leases, we capitalize the present value of the minimum lease payments over the lease terms as a right-of-use asset with an offsetting lease liability. The discount rate used to calculate the present value of the minimum lease payments is typically our incremental borrowing rate, as the rate implicit in the lease is generally not known or determinable. The lease term includes any noncancelable period for which we have the right to use the asset. Currently, all capitalized leases are classified as operating leases and the Company records lease expense on a straight-line basis over the term of the lease. Cash and cash equivalents: The Company considers short-term debt securities with an original maturity of three months or less to be cash equivalents. Substantially all cash and cash equivalents are held at a major U.S. money center bank or its foreign branches (Bank of America), or its investment broker affiliate (Merrill Lynch). The Company also holds certificates of deposit (CDs) of U.S. banks selected by this investment broker based on their financial ratings; substantially all such CDs are invested in separate individual banks which are generally not in excess of the Federal Deposit Insurance Corporation (FDIC) limit of $250 per bank. The cash in the Company's U.S. banks (primarily Bank of America) is not fully insured by the FDIC due to the statutory limit of $250. The Company had approximately $9,415 and $15,327 of cash in foreign banks, principally foreign branches of a U.S. bank (Bank of America), at December 31, 2019 and 2018, respectively. The Company's cash in its foreign bank accounts is also not fully insured. 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 debt 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 and foreign currency forward contracts. Commodity futures 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 lower of cost or net realizable value. The cost of substantially all of the Company’s inventories ($55,409 and $50,338 at December 31, 2019 and 2018, respectively) has been determined by the last-in, first-out (LIFO) method. The excess of current cost over LIFO cost of inventories approximates $19,174 and $17,062 at December 31, 2019 and 2018, respectively. The cost of certain foreign inventories ($3,679 and $4,186 at December 31, 2019 and 2018, 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 5 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 2019, 2018 and 2017, the Company recorded charges of $377, $1,125 and $2,371, respectively, relating to the impairment of assets of a foreign subsidiary which is included in selling, marketing and administrative expense. Except for the aforementioned, no impairment charges of long-lived assets were recorded by the Company during 2019, 2018 or 2017. 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 an executive officer. The Company records an asset equal to the cumulative insurance premiums paid that will be recovered upon the death of the covered executive officer or earlier under the terms of the plan. No premiums were paid in 2019, 2018 or 2017. 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 2019, 2018 or 2017. 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 2019, the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance. For the fair value assessment of certain trademarks where the “step-zero” analysis was not considered appropriate, impairment testing was performed in fourth quarter 2019 (and fourth quarter 2018) using discounted cash flows and estimated royalty rates. For these trademarks, holding all other assumptions constant at the test date, a 100 basis point increase in the discount rate or a 100 basis point decrease in the royalty rate would reduce the fair value of these trademarks by approximately 16% and 10%, respectively. Individually, a 100 basis point increase in the discount rate may result in potential impairment of up to $2 million. A 100 basis point decrease in the royalty rate would not result in a potential impairment as of December 31, 2019. 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 (U.S. Tax Cuts and Jobs Act) 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 subsidiary 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 2017 but no contributions were made to the trust in 2019 or 2018. The Company will be using the VEBA trust funds to pay the actual cost of such benefits through 2022. At December 31, 2019 and 2018, the VEBA trust held $12,085 and $15,921, 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 consist of short term (less than 120 days) borrowings by the Company’s Spanish subsidiary that are held by international banks. The weighted-average interest rate as of December 31, 2019 and 2018 was 3.0% and 2.0%, respectively. 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. Recently adopted accounting pronouncements: At the beginning of 2019, the Company adopted Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Subtopic 842), which requires lessees to recognize all leases with a term greater than 12 months on the balance sheet as right-of-use assets and lease liabilities . liabilities In August 2017, the FASB issued ASU 2017-12, guidance that amends hedge accounting. Under the new guidance, more hedging strategies are 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. On January 1, 2019, the Company adopted ASU 2017-12. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. Recently issued accounting pronouncements - not yet adopted In June 2016, the FASB issued ASU No. 2016-13, which replaces the current incurred loss impairment method with a new method that reflects expected credit losses. Under this new model an entity would recognize an impairment allowance equal to its current estimate of credit losses on financial assets measured at amortized cost. ASU 2016-13 is effective for public companies in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Based on the Company's analysis, ASU 2016-13 did not have a material impact on the Company's results of operations and financial condition upon adoption on January 1, 2020. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | NOTE 2—ACCRUED LIABILITIES: Accrued liabilities are comprised of the following: December 31, 2019 2018 Compensation $ 10,575 $ 10,034 Other employee benefits 7,509 7,947 Taxes, other than income 3,170 3,148 Advertising and promotions 14,421 15,125 Other 5,936 6,595 $ 41,611 $ 42,849 |
INDUSTRIAL DEVELOPMENT BONDS
INDUSTRIAL DEVELOPMENT BONDS | 12 Months Ended |
Dec. 31, 2019 | |
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 1.6% and 1.5% in 2019 and 2018, 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, 2019 | |
INCOME TAXES | |
INCOME TAXES | NOTE 4—INCOME TAXES: The domestic and foreign components of pretax income are as follows: 2019 2018 2017 Domestic $ 74,978 $ 66,253 $ 76,042 Foreign 10,426 6,953 8,519 $ 85,404 $ 73,206 $ 84,561 The provision for income taxes is comprised of the following: 2019 2018 2017 Current: Federal $ 15,133 $ 12,414 $ 6,019 State 2,942 1,421 369 18,075 13,835 6,388 Deferred: Federal (543) (577) (7,191) Foreign 2,422 2,685 3,425 State 611 458 1,285 2,490 2,566 (2,481) $ 20,565 $ 16,401 $ 3,907 Significant components of the Company’s net deferred tax liability at year end were as follows: December 31, 2019 2018 Deferred tax assets: Accrued customer promotions $ 198 $ 913 Deferred compensation 19,432 15,872 Postretirement benefits 3,439 3,119 Other accrued expenses 3,979 4,520 Foreign subsidiary tax loss carry forward 4,584 5,731 Outside basis difference in foreign subsidiary 365 273 Unrealized capital losses — 472 Deductible state tax depreciation 512 390 Tax credit carry forward 3,059 2,989 35,568 34,279 Valuation allowance (4,985) (3,892) Total deferred tax assets $ 30,583 $ 30,387 Deferred tax liabilities: Depreciation $ 23,375 $ 21,637 Deductible goodwill and trademarks 36,591 35,037 Accrued export company commissions 4,367 4,211 Employee benefit plans 2,700 3,539 Inventory reserves 2,526 2,784 Prepaid insurance 710 735 Unrealized capital gains 1,362 — Deferred foreign exchange gain 260 577 Deferred gain on sale of real estate 5,298 5,286 Total deferred tax liabilities $ 77,189 $ 73,806 Net deferred tax liability $ 46,606 $ 43,419 At December 31, 2019, the Company has benefits related to state tax credit carry-forwards expiring by year as follows: $23 in 2019, $672 in 2020, $784 in 2021, $50 in 2028, $131 in 2029, $213 in 2030, $225 in 2031, $238 in 2032, $211 in 2033 and $205 in 2034. The Company expects that not all the credits will be utilized before their expiration and has provided a valuation allowance for the expired amounts. At December 31, 2019, the tax benefits of the Company’s Canadian subsidiary tax loss carry-forwards expiring by year are as follows: $617 in 2031. At December 31, 2018, the amounts of the Company’s Spanish subsidiary loss carry-forwards expiring by year are as follows: $282 in 2026, $60 in 2027, $179 in 2028, $102 in 2029, $310 in 2030, $412 in 2031, $311 in 2032, $125 in 2033, $434 in 2034, $548 in 2035, $797 in 2036 and $407 in 2037. 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: 2019 2018 2017 U.S. statutory rate 21.0 % 21.0 % 35.0 % State income taxes, net 0.5 0.5 1.6 Exempt municipal bond interest (0.1) (0.1) (0.1) Foreign tax rates 1.4 2.1 0.5 Qualified domestic production activities deduction — — (0.8) Tax credits receivable 0.5 — (1.4) Adjustment of deferred tax balances 0.2 0.1 (24.2) Reserve for uncertain tax benefits 0.4 (1.0) (0.3) Worthless stock deduction — — (3.8) Other, net 0.2 (0.2) (1.9) Effective income tax rate 24.1 % 22.4 % 4.6 % The Company’s 2017 effective tax rate reflects a deferred tax benefit of $20,318 resulting from the revaluation of its net deferred tax liability related to the reduction of the U.S. corporate income tax rate to 21% for tax years beginning after December 31, 2017 under the 2017 Tax Cuts and Jobs Act as required by accounting guidance. The 2017 Tax Cuts and Jobs Act changed the United States approach to the taxation of foreign earnings to a territorial system by providing a one hundred percent dividends received deduction for certain qualified dividends received from foreign subsidiaries. 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 effective December 31, 2017, it will not be asserting permanent reinvestment of its foreign subsidiaries earnings. At December 31, 2019 and 2018, the Company had unrecognized tax benefits of $3,678 and $3,339, respectively. Included in this balance is $2,012 and $1,765, respectively, of unrecognized tax benefits that, if recognized, would favorably affect the annual effective income tax rate. As of December 31, 2019 and 2018, $562 and $477, 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: 2019 2018 2017 Unrecognized tax benefits at January 1 $ 3,339 $ 4,342 $ 4,746 Increases in tax positions for the current year 1,164 448 394 Reductions in tax positions for lapse of statute of limitations (576) (751) (793) Reductions in tax positions for settlements and payments (249) — — Increases (decreases) in prior period unrecognized tax benefits due to change in judgment — (700) (5) Unrecognized tax benefits at December 31 $ 3,678 $ 3,339 $ 4,342 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 generally remains subject to examination by U.S. federal and state and foreign tax authorities for the years 2016 through 2018. With few exceptions, the Company is no longer subject to examinations by tax authorities for the years 2015 and prior. |
SHARE CAPITAL AND CAPITAL IN EX
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE | 12 Months Ended |
Dec. 31, 2019 | |
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, 2017 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 Issuance of 3% stock dividend 1,125 781 746 519 3 — 58,688 Conversion of Class B common shares to common shares 53 37 (53) (37) — — — Purchase and retirement of common shares (594) (412) — — — — (18,905) Balance at December 31, 2018 38,544 26,767 25,584 17,767 88 (1,992) 696,535 Issuance of 3% stock dividend 1,150 798 768 532 2 — 32,999 Conversion of Class B common shares to common shares 65 45 (65) (45) — — — Purchase and retirement of common shares (923) (641) — — — — (33,475) Balance at December 31, 2019 38,836 $ 26,969 26,287 $ 18,254 90 $ (1,992) $ 696,059 Average shares outstanding and all per share amounts included in the financial statements and notes thereto have been adjusted retroactively to reflect annual three 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 2019 923 $ 36.93 2018 594 $ 32.48 2017 921 $ 37.01 |
OTHER INCOME, NET
OTHER INCOME, NET | 12 Months Ended |
Dec. 31, 2019 | |
OTHER INCOME, NET | |
OTHER INCOME, NET | NOTE 6—OTHER INCOME, NET: Other income, net is comprised of the following: 2019 2018 2017 Interest and dividend income $ 4,423 $ 3,535 $ 2,851 Gains (losses) on trading securities relating to deferred compensation plans 11,292 (1,103) 9,977 Interest expense (220) (181) (144) Foreign exchange gains (losses) (533) (659) 259 Capital gains (losses) 22 (11) 25 Miscellaneous, net 1,206 1,143 1,171 $ 16,190 $ 2,724 $ 14,139 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2019 | |
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 2019, 2018 and 2017 approximated $3,114, $2,988 and $3,087, respectively. The Company also maintains certain profit sharing and retirement savings-investment plans. Company contributions in 2019, 2018 and 2017 to these plans were $2,858, $2,734 and $2,512 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: 51.60% funded as of January 1, 2018 The Company’s contributions to such plan: $2,943, $2,836 and $2,603 in 2019, 2018 and 2017, respectively Plan status: Critical and declining as of December 31, 2018 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 2012. During 2015, the Company received new notices that the Plan was reclassified to “critical and declining status”, as defined by the PPA and PBGC, for the plan year beginning January 1, 2015. A designation of “critical and declining status” implies that the Plan is expected to become insolvent in the next 20 years. In 2016, the Company received new notices that the Plan’s trustees adopted an updated Rehabilitation Plan effective January 1, 2016, and all annual notices through 2019 have continued to classify the Plan in the “critical and declining status” category. The Company has been advised that its withdrawal liability would have been $99,800, $81,600 and $82,200 if it had withdrawn from the Plan during 2019, 2018 and 2017, respectively. 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 2012) as well as certain plan benefit reductions. The Company’s pension expense for this Plan for 2019, 2018 and 2017 was $2,961, $2,836 and $2,617, respectively. The aforementioned expense includes surcharges of $948, $811 and $656 in 2019, 2018 and 2017, 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, 2019 and 2018, these investments totaled $76,183 and $62,260, 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 $13,743 and $12,451 at December 31, 2019 and 2018, respectively. Amounts recognized in accumulated other comprehensive loss (pre-tax) at December 31, 2019 are as follows: Prior service credit $ (3,066) Net actuarial gain (808) Net amount recognized in accumulated other comprehensive loss $ (3,874) The estimated actuarial gain and prior service credit to be amortized from accumulated other comprehensive loss into net periodic benefit income during 2020 are $123 and $1,227, respectively. The changes in the accumulated postretirement benefit obligation at December 31, 2019 and 2018 consist of the following: December 31, 2019 2018 Benefit obligation, beginning of year $ 12,451 $ 13,497 Service cost 270 337 Interest cost 499 455 Actuarial (gain)/loss 922 (1,409) Benefits paid (399) (429) Benefit obligation, end of year $ 13,743 $ 12,451 Net periodic postretirement benefit cost (income) included the following components: 2019 2018 2017 Service cost—benefits attributed to service during the period $ 270 $ 337 $ 323 Interest cost on the accumulated postretirement benefit obligation 499 455 468 Net amortization (1,522) (1,324) (1,462) Net periodic postretirement benefit cost (income) $ (753) $ (532) $ (671) The Company estimates future benefit payments will be $598, $614, $637, $677 and $692 in 2020 through 2024, respectively, and a total of $3,687 in 2025 through 2029. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS | |
COMMITMENTS | NOTE 8—COMMITMENTS: Lease expense aggregated $1,032, $793 and $785 in 2019, 2018 and 2017, respectively. Future operating lease commitments are as follows: $979, $540, and $61 in 2020, 2021 and 2022, respectively. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
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: 2019 2018 2017 Net product sales: United States $ 478,790 $ 471,561 $ 472,222 Canada, Mexico and Other 44,826 43,690 43,452 $ 523,616 $ 515,251 $ 515,674 Long-lived assets: United States $ 155,428 $ 151,770 $ 145,210 Canada 30,412 31,843 30,823 Mexico and Other 2,615 2,488 2,939 $ 188,455 $ 186,101 $ 178,972 Sales revenues from Wal-Mart Stores, Inc. aggregated approximately 24.2%, 24.1%, and 24.0% of net product sales during the years ended December 31, 2019, 2018 and 2017, respectively. Sales revenues from Dollar Tree, Inc. (which includes Family Dollar which was acquired by Dollar Tree) aggregated approximately 11.3%, 11.2%, and 10.9% of net product sales during the years ended December 31, 2019, 2018 and 2017, respectively. Some of the aforementioned sales to Wal-Mart and Dollar Tree are sold to McLane Company, a large national grocery wholesaler, which services and delivers certain of the Company’s products to Wal-Mart, Dollar Tree and other retailers in the U.S.A. Net product sales revenues from McLane, which includes these Wal-Mart and Dollar Tree sales as well as sales and deliveries to other Company customers, were 17.7% in 2019 and 17.4% in 2018 and 16.9% in 2017. At December 31, 2019 and 2018, the Company’s three largest customers discussed above accounted for approximately 30% and 31% of total accounts receivable, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and 2018, 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 corporate and 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, 2019 and 2018, and indicate the fair value hierarchy and the valuation techniques utilized by the Company to determine such fair value: Estimated Fair Value December 31, 2019 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 138,960 $ 138,960 $ — $ — Available for sale securities 177,292 3,588 173,704 — Foreign currency forward contracts 14 — 14 — Commodity futures contracts, net 121 121 — — Trading securities 76,183 48,260 27,923 — Total assets measured at fair value $ 392,570 $ 190,929 $ 201,641 $ — Estimated Fair Value December 31, 2018 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 110,899 $ 110,899 $ — $ — Available for sale securities 183,289 3,007 180,282 — Foreign currency forward contracts (407) — (407) — Commodity futures contracts, net (587) (587) — — Trading securities 62,260 36,753 25,507 — Total assets measured at fair value $ 355,454 $ 150,072 $ 205,382 $ — Available for sale securities which utilize Level 2 inputs consist primarily of corporate and municipal bonds and variable rate demand notes, 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, 2019 Amortized Fair Unrealized Realized Available for Sale: Cost Value Gains Losses Losses Municipal bonds $ — $ — $ — $ — $ — Variable rate demand notes 25,845 25,845 — — — Corporate bonds 139,803 140,797 994 — — Government securities 3,503 3,588 85 — — Certificates of deposit 6,978 7,062 84 — — $ 176,129 $ 177,292 $ 1,163 $ — $ — December 31, 2018 Amortized Fair Unrealized Realized Available for Sale: Cost Value Gains Losses Losses Municipal bonds $ 6,173 $ 5,123 $ — $ (1,050) $ — Variable rate demand notes 20,195 20,195 — — — Corporate bonds 149,795 148,863 — (932) — Government securities 2,979 3,007 28 — — Certificates of deposit 6,148 6,101 — (47) — $ 185,290 $ 183,289 $ 28 $ (2,029) $ — The fair value of the Company’s industrial revenue development bonds at December 31, 2019 and 2018 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, 2019 | |
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 and commodity futures contracts to manage its exposures to foreign exchange and commodity prices. Commodity futures 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 $121 of this accumulated comprehensive gain is expected to be charged to earnings in 2020. Approximately $14 in accumulated other comprehensive gain for foreign currency derivatives is expected to be reclassified to other income, net in 2020. The following table summarizes the Company’s outstanding derivative contracts and their effects on its Consolidated Statements of Financial Position at December 31, 2019 and 2018: December 31, 2019 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ 5,533 $ 14 $ — Commodity futures contracts 7,147 205 (84) Total derivatives $ 219 $ (84) December 31, 2018 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ 11,050 $ — $ (407) Commodity futures contracts 9,580 92 (679) Total derivatives $ 92 $ (1,086) The effects of derivative instruments on the Company’s Consolidated Statement of Earnings, Comprehensive Earnings and Retained Earnings for years ended December 31, 2019 and 2018 are as follows: For Year Ended December 31, 2019 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 $ 359 $ (62) $ — Commodity futures contracts 92 (615) — Total $ 451 $ (677) $ — For Year Ended December 31, 2018 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 $ (418) $ 67 $ — Commodity futures contracts (2,316) (1,697) — Total $ (2,734) $ (1,630) $ — |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
ACCUMULATED OTHER COMPREHENSIVE 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, 2017 $ (24,262) $ (889) $ 51 $ 20 $ 3,289 $ (21,791) Other comprehensive earnings (loss) before reclassifications 103 (459) (318) (1,754) 1,172 (1,256) Reclassifications from accumulated other comprehensive loss — — (51) 1,286 (1,003) 232 Other comprehensive earnings (loss) net of tax 103 (459) (369) (468) 169 (1,024) Adoption of ASU 2018-02 - (168) 9 4 748 593 Balance at December 31, 2018 $ (24,159) $ (1,516) $ (309) $ (444) $ 4,206 $ (22,222) Other comprehensive earnings (loss) before reclassifications 791 2,372 272 70 (914) 2,591 Reclassifications from accumulated other comprehensive loss — 26 47 466 (1,153) (614) Other comprehensive earnings (loss) net of tax 791 2,398 319 536 (2,067) 1,977 Balance at December 31, 2019 $ (23,368) $ 882 $ 10 $ 92 $ 2,139 $ (20,245) 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, 2019 December 31, 2018 Location of (Gain) Loss Recognized in Earnings Investments $ 34 $ - Other income, net Foreign currency derivatives 62 (67) Other income, net Commodity derivatives 615 1,697 Product cost of goods sold Postretirement and pension benefits (1,522) (1,324) Other income, net Total before tax (811) 306 Tax expense (benefit) 197 (74) Net of tax $ (614) $ 232 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
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 2019 and 2018 were as follows: 2019 2018 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. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
LEASES | |
LEASES | Note 14 — LEASES The Company leases certain buildings, land and equipment that are classified as operating leases. These leases have remaining lease terms of up to approximately 3 years . In the fourth quarter and twelve months of 2019, operating lease cost and cash paid for operating lease liabilities totaled $258 and $1,004 , respectively, which is classified in cash flows from operating activities. As of December 31 2019, operating lease right-of-use assets and operating lease liabilities were both $1,580 . The weighted-average remaining lease term related to these operating leases was 1.6 years as of December 31, 2019. The weighted-average discount rate related to our operating leases was 3.1% as of December 31, 2019. Maturities of operating lease liabilities at December 31, 2019 are as follows: $979 in 2020, $540 in 2021, and $61 in 2022. The Company, as lessor, rents certain commercial real estate to third party lessees. The cost and accumulated depreciation related to these leased properties were $36,378 and $10,252 , respectively, as of December 31, 2019. Terms of such leases, including renewal options, may be extended for up to sixty years, many of which provide for periodic adjustment of rent payments based on changes in consumer or other price indices. The Company recognizes lease income on a straight-line basis over the lease term. Lease income in fourth quarter and twelve months 2019 was $718 and $2,951 , respectively, and is classified in cash flows from operating activities. |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2019 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | NOTE 15—QUARTERLY FINANCIAL DATA (UNAUDITED): (Thousands of dollars except per share data) First Second Third Fourth Year 2019 Net product sales $ 101,019 $ 106,021 $ 181,913 $ 134,663 $ 523,616 Product gross margin 36,163 40,076 69,046 49,229 194,514 Net earnings attributable to Tootsie Roll Industries, Inc. 8,955 11,556 29,854 14,555 64,920 Net earnings attributable to Tootsie Roll Industries, Inc. per share 0.14 0.18 0.46 0.22 0.99 2018 Net product sales $ 100,859 $ 105,623 $ 181,505 $ 127,264 $ 515,251 Product gross margin 35,025 38,142 66,259 45,945 185,371 Net earnings attributable to Tootsie Roll Industries, Inc. 8,125 10,489 26,104 12,175 56,893 Net earnings attributable to Tootsie Roll Industries, Inc. per share 0.12 0.16 0.40 0.18 0.86 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. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2019 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS (in thousands) DECEMBER 31, 2019, 2018 and 2017 Additions (reductions) Balance at charged Balance at beginning (credited) to End of Description of year expense Deductions(1) Year 2019: Reserve for bad debts $ 1,128 $ 676 $ 467 $ 1,337 Reserve for cash discounts 692 9,482 9,562 612 Deferred tax asset valuation 3,892 1,093 — 4,985 $ 5,712 $ 11,251 $ 10,029 $ 6,934 2018: Reserve for bad debts $ 1,197 $ 38 $ 107 $ 1,128 Reserve for cash discounts 724 9,122 9,154 692 Deferred tax asset valuation 3,269 623 — 3,892 $ 5,190 $ 9,783 $ 9,261 $ 5,712 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 (1) Deductions against reserve for bad debts consist of accounts receivable written off net of recoveries and exchange rate movements. Deductions against reserve for cash discounts consist of allowances to customers. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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: The Company’s revenues, primarily net product sales, principally result from the sale of goods, reflect the consideration to which the Company expects to be entitled, generally based on customer purchase orders. The Company records revenue based on a five-step model in accordance with Accounting Standards Codification ("ASC") Topic 606 which became effective January, 1, 2018. Adjustments for estimated customer cash discounts upon payment, discounts for price adjustments, product returns, allowances, and certain advertising and promotional costs, including consumer coupons, are variable consideration and are recorded as a reduction of product sales revenue in the same period the related product sales are recorded. Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. A net product sale is recorded when the Company delivers the product to the customer, or in certain instances, the customer picks up the goods at the Company’s distribution center, and thereby obtains control of such product. Amounts billed and due from our customers are classified as accounts receivables trade on the balance sheet and require payment on a short-term basis. Accounts receivable are unsecured. Shipping and handling costs of $49,288, $49,527, and $44,082 in 2019, 2018 and 2017, respectively, are included in selling, marketing and administrative expenses. A minor amount of royalty income (less than 0.2% of our consolidated net sales) is also recognized from sales-based licensing arrangements, pursuant to which revenue is recognized as the third-party licensee sales occur. Rental income (less than 1% of our consolidated net sales) is not considered revenue from contracts from customers. |
Leases | Leases: The Company identifies leases by evaluating our contracts to determine if the contract conveys the right to use an identified asset for a stated period of time in exchange for consideration. The Company considers whether it can control the underlying asset and has the right to obtain substantially all of the economic benefits or outputs from the asset. Leases with terms greater than 12 months are classified as either operating or finance leases at the commencement date. For these leases, we capitalize the present value of the minimum lease payments over the lease terms as a right-of-use asset with an offsetting lease liability. The discount rate used to calculate the present value of the minimum lease payments is typically our incremental borrowing rate, as the rate implicit in the lease is generally not known or determinable. The lease term includes any noncancelable period for which we have the right to use the asset. Currently, all capitalized leases are classified as operating leases and the Company records lease expense on a straight-line basis over the term of the lease. |
Cash and cash equivalents | Cash and cash equivalents: The Company considers short-term debt securities with an original maturity of three months or less to be cash equivalents. Substantially all cash and cash equivalents are held at a major U.S. money center bank or its foreign branches (Bank of America), or its investment broker affiliate (Merrill Lynch). The Company also holds certificates of deposit (CDs) of U.S. banks selected by this investment broker based on their financial ratings; substantially all such CDs are invested in separate individual banks which are generally not in excess of the Federal Deposit Insurance Corporation (FDIC) limit of $250 per bank. The cash in the Company's U.S. banks (primarily Bank of America) is not fully insured by the FDIC due to the statutory limit of $250. The Company had approximately $9,415 and $15,327 of cash in foreign banks, principally foreign branches of a U.S. bank (Bank of America), at December 31, 2019 and 2018, respectively. The Company's cash in its foreign bank accounts is also not fully insured. |
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 debt 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 and foreign currency forward contracts. Commodity futures 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 lower of cost or net realizable value. The cost of substantially all of the Company’s inventories ($55,409 and $50,338 at December 31, 2019 and 2018, respectively) has been determined by the last-in, first-out (LIFO) method. The excess of current cost over LIFO cost of inventories approximates $19,174 and $17,062 at December 31, 2019 and 2018, respectively. The cost of certain foreign inventories ($3,679 and $4,186 at December 31, 2019 and 2018, 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 5 |
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 2019, 2018 and 2017, the Company recorded charges of $377, $1,125 and $2,371, respectively, relating to the impairment of assets of a foreign subsidiary which is included in selling, marketing and administrative expense. Except for the aforementioned, no impairment charges of long-lived assets were recorded by the Company during 2019, 2018 or 2017. |
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 an executive officer. The Company records an asset equal to the cumulative insurance premiums paid that will be recovered upon the death of the covered executive officer or earlier under the terms of the plan. No premiums were paid in 2019, 2018 or 2017. |
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 2019, 2018 or 2017. 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 2019, the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance. For the fair value assessment of certain trademarks where the “step-zero” analysis was not considered appropriate, impairment testing was performed in fourth quarter 2019 (and fourth quarter 2018) using discounted cash flows and estimated royalty rates. For these trademarks, holding all other assumptions constant at the test date, a 100 basis point increase in the discount rate or a 100 basis point decrease in the royalty rate would reduce the fair value of these trademarks by approximately 16% and 10%, respectively. Individually, a 100 basis point increase in the discount rate may result in potential impairment of up to $2 million. A 100 basis point decrease in the royalty rate would not result in a potential impairment as of December 31, 2019. |
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 (U.S. Tax Cuts and Jobs Act) 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 subsidiary 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 2017 but no contributions were made to the trust in 2019 or 2018. The Company will be using the VEBA trust funds to pay the actual cost of such benefits through 2022. At December 31, 2019 and 2018, the VEBA trust held $12,085 and $15,921, 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 consist of short term (less than 120 days) borrowings by the Company’s Spanish subsidiary that are held by international banks. The weighted-average interest rate as of December 31, 2019 and 2018 was 3.0% and 2.0%, respectively. |
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 | Recently adopted accounting pronouncements: At the beginning of 2019, the Company adopted Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Subtopic 842), which requires lessees to recognize all leases with a term greater than 12 months on the balance sheet as right-of-use assets and lease liabilities . liabilities In August 2017, the FASB issued ASU 2017-12, guidance that amends hedge accounting. Under the new guidance, more hedging strategies are 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. On January 1, 2019, the Company adopted ASU 2017-12. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. Recently issued accounting pronouncements - not yet adopted In June 2016, the FASB issued ASU No. 2016-13, which replaces the current incurred loss impairment method with a new method that reflects expected credit losses. Under this new model an entity would recognize an impairment allowance equal to its current estimate of credit losses on financial assets measured at amortized cost. ASU 2016-13 is effective for public companies in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Based on the Company's analysis, ASU 2016-13 did not have a material impact on the Company's results of operations and financial condition upon adoption on January 1, 2020. |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED LIABILITIES | |
Schedule of accrued liabilities | December 31, 2019 2018 Compensation $ 10,575 $ 10,034 Other employee benefits 7,509 7,947 Taxes, other than income 3,170 3,148 Advertising and promotions 14,421 15,125 Other 5,936 6,595 $ 41,611 $ 42,849 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of domestic and foreign components of pretax income | 2019 2018 2017 Domestic $ 74,978 $ 66,253 $ 76,042 Foreign 10,426 6,953 8,519 $ 85,404 $ 73,206 $ 84,561 |
Schedule of components of provision of income taxes | 2019 2018 2017 Current: Federal $ 15,133 $ 12,414 $ 6,019 State 2,942 1,421 369 18,075 13,835 6,388 Deferred: Federal (543) (577) (7,191) Foreign 2,422 2,685 3,425 State 611 458 1,285 2,490 2,566 (2,481) $ 20,565 $ 16,401 $ 3,907 |
Schedule of significant components of net deferred tax liability | December 31, 2019 2018 Deferred tax assets: Accrued customer promotions $ 198 $ 913 Deferred compensation 19,432 15,872 Postretirement benefits 3,439 3,119 Other accrued expenses 3,979 4,520 Foreign subsidiary tax loss carry forward 4,584 5,731 Outside basis difference in foreign subsidiary 365 273 Unrealized capital losses — 472 Deductible state tax depreciation 512 390 Tax credit carry forward 3,059 2,989 35,568 34,279 Valuation allowance (4,985) (3,892) Total deferred tax assets $ 30,583 $ 30,387 Deferred tax liabilities: Depreciation $ 23,375 $ 21,637 Deductible goodwill and trademarks 36,591 35,037 Accrued export company commissions 4,367 4,211 Employee benefit plans 2,700 3,539 Inventory reserves 2,526 2,784 Prepaid insurance 710 735 Unrealized capital gains 1,362 — Deferred foreign exchange gain 260 577 Deferred gain on sale of real estate 5,298 5,286 Total deferred tax liabilities $ 77,189 $ 73,806 Net deferred tax liability $ 46,606 $ 43,419 |
Schedule of reconciliation of statutory and effective income tax rate | 2019 2018 2017 U.S. statutory rate 21.0 % 21.0 % 35.0 % State income taxes, net 0.5 0.5 1.6 Exempt municipal bond interest (0.1) (0.1) (0.1) Foreign tax rates 1.4 2.1 0.5 Qualified domestic production activities deduction — — (0.8) Tax credits receivable 0.5 — (1.4) Adjustment of deferred tax balances 0.2 0.1 (24.2) Reserve for uncertain tax benefits 0.4 (1.0) (0.3) Worthless stock deduction — — (3.8) Other, net 0.2 (0.2) (1.9) Effective income tax rate 24.1 % 22.4 % 4.6 % |
Schedule of reconciliation of beginning and ending balances of total amounts of unrecognized tax benefits | 2019 2018 2017 Unrecognized tax benefits at January 1 $ 3,339 $ 4,342 $ 4,746 Increases in tax positions for the current year 1,164 448 394 Reductions in tax positions for lapse of statute of limitations (576) (751) (793) Reductions in tax positions for settlements and payments (249) — — Increases (decreases) in prior period unrecognized tax benefits due to change in judgment — (700) (5) Unrecognized tax benefits at December 31 $ 3,678 $ 3,339 $ 4,342 |
SHARE CAPITAL AND CAPITAL IN _2
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2017 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 Issuance of 3% stock dividend 1,125 781 746 519 3 — 58,688 Conversion of Class B common shares to common shares 53 37 (53) (37) — — — Purchase and retirement of common shares (594) (412) — — — — (18,905) Balance at December 31, 2018 38,544 26,767 25,584 17,767 88 (1,992) 696,535 Issuance of 3% stock dividend 1,150 798 768 532 2 — 32,999 Conversion of Class B common shares to common shares 65 45 (65) (45) — — — Purchase and retirement of common shares (923) (641) — — — — (33,475) Balance at December 31, 2019 38,836 $ 26,969 26,287 $ 18,254 90 $ (1,992) $ 696,059 |
Schedule of shares purchased and retired | Total Number of Shares Year Purchased (000’s) Average Price Paid Per Share 2019 923 $ 36.93 2018 594 $ 32.48 2017 921 $ 37.01 |
OTHER INCOME, NET (Tables)
OTHER INCOME, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER INCOME, NET | |
Schedule of other income, net | 2019 2018 2017 Interest and dividend income $ 4,423 $ 3,535 $ 2,851 Gains (losses) on trading securities relating to deferred compensation plans 11,292 (1,103) 9,977 Interest expense (220) (181) (144) Foreign exchange gains (losses) (533) (659) 259 Capital gains (losses) 22 (11) 25 Miscellaneous, net 1,206 1,143 1,171 $ 16,190 $ 2,724 $ 14,139 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of amounts recognized in accumulated other comprehensive loss (pre-tax) | Prior service credit $ (3,066) Net actuarial gain (808) Net amount recognized in accumulated other comprehensive loss $ (3,874) |
Schedule of changes in accumulated postretirement benefit obligation | December 31, 2019 2018 Benefit obligation, beginning of year $ 12,451 $ 13,497 Service cost 270 337 Interest cost 499 455 Actuarial (gain)/loss 922 (1,409) Benefits paid (399) (429) Benefit obligation, end of year $ 13,743 $ 12,451 |
Schedule of net periodic postretirement benefit cost (income) | 2019 2018 2017 Service cost—benefits attributed to service during the period $ 270 $ 337 $ 323 Interest cost on the accumulated postretirement benefit obligation 499 455 468 Net amortization (1,522) (1,324) (1,462) Net periodic postretirement benefit cost (income) $ (753) $ (532) $ (671) |
SEGMENT AND GEOGRAPHIC INFORM_2
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
Schedule of geographic data | 2019 2018 2017 Net product sales: United States $ 478,790 $ 471,561 $ 472,222 Canada, Mexico and Other 44,826 43,690 43,452 $ 523,616 $ 515,251 $ 515,674 Long-lived assets: United States $ 155,428 $ 151,770 $ 145,210 Canada 30,412 31,843 30,823 Mexico and Other 2,615 2,488 2,939 $ 188,455 $ 186,101 $ 178,972 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities measured at fair value | Estimated Fair Value December 31, 2019 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 138,960 $ 138,960 $ — $ — Available for sale securities 177,292 3,588 173,704 — Foreign currency forward contracts 14 — 14 — Commodity futures contracts, net 121 121 — — Trading securities 76,183 48,260 27,923 — Total assets measured at fair value $ 392,570 $ 190,929 $ 201,641 $ — Estimated Fair Value December 31, 2018 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 110,899 $ 110,899 $ — $ — Available for sale securities 183,289 3,007 180,282 — Foreign currency forward contracts (407) — (407) — Commodity futures contracts, net (587) (587) — — Trading securities 62,260 36,753 25,507 — Total assets measured at fair value $ 355,454 $ 150,072 $ 205,382 $ — |
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, 2019 Amortized Fair Unrealized Realized Available for Sale: Cost Value Gains Losses Losses Municipal bonds $ — $ — $ — $ — $ — Variable rate demand notes 25,845 25,845 — — — Corporate bonds 139,803 140,797 994 — — Government securities 3,503 3,588 85 — — Certificates of deposit 6,978 7,062 84 — — $ 176,129 $ 177,292 $ 1,163 $ — $ — December 31, 2018 Amortized Fair Unrealized Realized Available for Sale: Cost Value Gains Losses Losses Municipal bonds $ 6,173 $ 5,123 $ — $ (1,050) $ — Variable rate demand notes 20,195 20,195 — — — Corporate bonds 149,795 148,863 — (932) — Government securities 2,979 3,007 28 — — Certificates of deposit 6,148 6,101 — (47) — $ 185,290 $ 183,289 $ 28 $ (2,029) $ — |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Summary of the Company's outstanding derivative contracts and their effects on the Consolidated Statements of Financial Position | December 31, 2019 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ 5,533 $ 14 $ — Commodity futures contracts 7,147 205 (84) Total derivatives $ 219 $ (84) December 31, 2018 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency forward contracts $ 11,050 $ — $ (407) Commodity futures contracts 9,580 92 (679) Total derivatives $ 92 $ (1,086) |
Effects of derivative instruments on the Consolidated Statement of Earnings and Retained Earnings, and the Condensed Consolidated Statement of Comprehensive Earnings | For Year Ended December 31, 2019 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 $ 359 $ (62) $ — Commodity futures contracts 92 (615) — Total $ 451 $ (677) $ — For Year Ended December 31, 2018 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 $ (418) $ 67 $ — Commodity futures contracts (2,316) (1,697) — Total $ (2,734) $ (1,630) $ — |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE 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, 2017 $ (24,262) $ (889) $ 51 $ 20 $ 3,289 $ (21,791) Other comprehensive earnings (loss) before reclassifications 103 (459) (318) (1,754) 1,172 (1,256) Reclassifications from accumulated other comprehensive loss — — (51) 1,286 (1,003) 232 Other comprehensive earnings (loss) net of tax 103 (459) (369) (468) 169 (1,024) Adoption of ASU 2018-02 - (168) 9 4 748 593 Balance at December 31, 2018 $ (24,159) $ (1,516) $ (309) $ (444) $ 4,206 $ (22,222) Other comprehensive earnings (loss) before reclassifications 791 2,372 272 70 (914) 2,591 Reclassifications from accumulated other comprehensive loss — 26 47 466 (1,153) (614) Other comprehensive earnings (loss) net of tax 791 2,398 319 536 (2,067) 1,977 Balance at December 31, 2019 $ (23,368) $ 882 $ 10 $ 92 $ 2,139 $ (20,245) |
Amount reclassified from accumulated other comprehensive income (loss) | Details about Accumulated Other Year to Date Ended Comprehensive Income Components December 31, 2019 December 31, 2018 Location of (Gain) Loss Recognized in Earnings Investments $ 34 $ - Other income, net Foreign currency derivatives 62 (67) Other income, net Commodity derivatives 615 1,697 Product cost of goods sold Postretirement and pension benefits (1,522) (1,324) Other income, net Total before tax (811) 306 Tax expense (benefit) 197 (74) Net of tax $ (614) $ 232 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in carrying amount of trademarks | 2019 2018 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 (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of quarterly results | (Thousands of dollars except per share data) First Second Third Fourth Year 2019 Net product sales $ 101,019 $ 106,021 $ 181,913 $ 134,663 $ 523,616 Product gross margin 36,163 40,076 69,046 49,229 194,514 Net earnings attributable to Tootsie Roll Industries, Inc. 8,955 11,556 29,854 14,555 64,920 Net earnings attributable to Tootsie Roll Industries, Inc. per share 0.14 0.18 0.46 0.22 0.99 2018 Net product sales $ 100,859 $ 105,623 $ 181,505 $ 127,264 $ 515,251 Product gross margin 35,025 38,142 66,259 45,945 185,371 Net earnings attributable to Tootsie Roll Industries, Inc. 8,125 10,489 26,104 12,175 56,893 Net earnings attributable to Tootsie Roll Industries, Inc. per share 0.12 0.16 0.40 0.18 0.86 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Concentration of Risk | |||
Selling, marketing and administrative expenses | $ 127,802 | $ 117,691 | $ 121,484 |
Cash and cash equivalents: | |||
Cash and cash equivalents | $ 138,960 | 110,899 | |
Investments: | |||
Marketable securities, maximum maturity period | 3 years | ||
Inventories: | |||
Inventories at cost, last-in, first-out (LIFO) method | $ 55,409 | 50,338 | |
Excess of current cost over LIFO cost of inventories | 19,174 | 17,062 | |
Foreign inventories at cost, first-in, first-out (FIFO) method | 3,679 | 4,186 | |
Foreign Banks | |||
Cash and cash equivalents: | |||
Cash and cash equivalents | $ 9,415 | 15,327 | |
Royalty | Maximum | |||
Concentration of Risk | |||
Revenues (as a percent) | 0.20% | ||
Rental | Maximum | |||
Concentration of Risk | |||
Revenues (as a percent) | 1.00% | ||
Shipping and Handling | |||
Concentration of Risk | |||
Selling, marketing and administrative expenses | $ 49,288 | $ 49,527 | $ 44,082 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Property (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, plant and equipment: | ||||||
Depreciation expense | $ 18,779 | $ 18,669 | $ 18,991 | |||
Carrying value of long-lived assets: | ||||||
Impairment charges of long-lived assets | $ 377 | $ 1,126 | $ 2,371 | |||
Buildings | Minimum | ||||||
Property, plant and equipment: | ||||||
Useful lives | 20 years | |||||
Buildings | Maximum | ||||||
Property, plant and equipment: | ||||||
Useful lives | 40 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 | $ 377 | $ 1,125 | $ 2,371 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Benefits and Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |||
Premium paid for split dollar life insurance agreements | $ 0 | $ 0 | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Invest, VEBA, NP (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
VEBA trust | ||||
Contribution by entity to VEBA trust | $ 0 | $ 0 | $ 20,024 | |
Cash and cash equivalents held by VEBA trust | $ 138,960 | $ 138,960 | $ 110,899 | |
Bank loans | ||||
Weighted interest rate (as a percent) | 3.00% | 3.00% | 2.00% | |
Goodwill and indefinite-lived intangible assets: | ||||
Impairments of intangibles | $ 0 | $ 0 | $ 0 | |
Trademarks | ||||
Goodwill and indefinite-lived intangible assets: | ||||
Number of basis points increase in discount rate | 1.00% | |||
Number of basis points decrease in royalty rate | 1.00% | |||
Percentage of reduction of fair value due to increase in discount rate | 16.00% | |||
Percentage of reduction of fair value due to decrease in royalty rate | 10.00% | |||
Potential impairment due to increase in discount rate | $ 2,000 | |||
VEBA Trust | Level 1 | ||||
VEBA trust | ||||
Cash and cash equivalents held by VEBA trust | $ 12,085 | $ 12,085 | $ 15,921 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - EPS (Details) | 12 Months Ended |
Dec. 31, 2019item | |
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 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 02, 2019 | Dec. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease liabilities | $ 1,580 | ||
Operating lease right-of-use assets | $ 1,580 | ||
Right-of-use asset obtained in exchange for operating lease liability | $ 652 | ||
ASU 2016-02 | Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease liabilities | $ 1,482 | ||
Operating lease right-of-use assets | $ 1,482 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
ACCRUED LIABILITIES | ||
Compensation | $ 10,575 | $ 10,034 |
Other employee benefits | 7,509 | 7,947 |
Taxes, other than income | 3,170 | 3,148 |
Advertising and promotions | 14,421 | 15,125 |
Other | 5,936 | 6,595 |
Total accrued liabilities | $ 41,611 | $ 42,849 |
INDUSTRIAL DEVELOPMENT BONDS (D
INDUSTRIAL DEVELOPMENT BONDS (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
INDUSTRIAL DEVELOPMENT BONDS | ||
Industrial development bonds, average floating interest rate (as a percent) | 1.60% | 1.50% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Domestic and foreign components of pretax income | |||
Domestic | $ 74,978 | $ 66,253 | $ 76,042 |
Foreign | 10,426 | 6,953 | 8,519 |
Earnings before income taxes | 85,404 | 73,206 | 84,561 |
Current: | |||
Federal | 15,133 | 12,414 | 6,019 |
State | 2,942 | 1,421 | 369 |
Total current | 18,075 | 13,835 | 6,388 |
Deferred: | |||
Federal | (543) | (577) | (7,191) |
Foreign | 2,422 | 2,685 | 3,425 |
State | 611 | 458 | 1,285 |
Total deferred | 2,490 | 2,566 | (2,481) |
Total provision for income taxes | 20,565 | 16,401 | $ 3,907 |
Deferred tax assets: | |||
Accrued customer promotions | 198 | 913 | |
Deferred compensation | 19,432 | 15,872 | |
Postretirement benefits | 3,439 | 3,119 | |
Other accrued expenses | 3,979 | 4,520 | |
Foreign subsidiary tax loss carry forward | 4,584 | 5,731 | |
Outside basis difference in foreign subsidiary | 365 | 273 | |
Unrealized capital losses | 472 | ||
Deductible state tax depreciation | 512 | 390 | |
Tax credit carry forward | 3,059 | 2,989 | |
Deferred tax assets, gross | 35,568 | 34,279 | |
Valuation allowance | (4,985) | (3,892) | |
Total deferred tax assets | 30,583 | 30,387 | |
Deferred tax liabilities: | |||
Depreciation | 23,375 | 21,637 | |
Deductible goodwill and trademarks | 36,591 | 35,037 | |
Accrued export company commissions | 4,367 | 4,211 | |
Employee benefit plans | 2,700 | 3,539 | |
Inventory reserves | 2,526 | 2,784 | |
Prepaid insurance | 710 | 735 | |
Unrealized capital gain | 1,362 | ||
Deferred foreign exchange gain | 260 | 577 | |
Deferred gain on sale of real estate | 5,298 | 5,286 | |
Total deferred tax liabilities | 77,189 | 73,806 | |
Net deferred tax liability | 46,606 | $ 43,419 | |
State tax credit carry-forwards expiring in 2019 | 23 | ||
State tax credit carry-forwards expiring in 2020 | 672 | ||
State tax credit carry-forwards expiring in 2021 | 784 | ||
State tax credit carry-forwards expiring in 2028 | 50 | ||
State tax credit carry-forwards expiring in 2029 | 131 | ||
State tax credit carry-forwards expiring in 2030 | 213 | ||
State tax credit carry-forwards expiring in 2031 | 225 | ||
State tax credit carry-forwards expiring in 2032 | 238 | ||
State tax credit carry-forwards expiring in 2033 | 211 | ||
State tax credit carry-forwards expiring in 2034 | $ 205 | ||
U.S. statutory rate (as a percent) | 21.00% | 21.00% | 35.00% |
INCOME TAXES - Effective tax ra
INCOME TAXES - Effective tax rate - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effective income tax rate differs from the statutory rate | |||||
U.S. statutory rate (as a percent) | 21.00% | 21.00% | 35.00% | ||
State income taxes, net (as a percent) | 0.50% | 0.50% | 1.60% | ||
Exempt municipal bond interest (as a percent) | (0.10%) | (0.10%) | (0.10%) | ||
Foreign tax rates (as a percent) | 1.40% | 2.10% | 0.50% | ||
Qualified domestic production activities deduction (as a percent) | (0.80%) | ||||
Tax credits receivable (as a percent) | 0.50% | (1.40%) | |||
Adjustment of deferred tax balances (as a percent) | 0.20% | 0.10% | (24.20%) | ||
Reserve for uncertain tax benefits (as a percent) | 0.40% | (1.00%) | (0.30%) | ||
Worthless stock deduction (as a percent) | (3.80%) | ||||
Other, net (as a percent) | 0.20% | (0.20%) | (1.90%) | ||
Effective income tax rate (as a percent) | 24.10% | 22.40% | 4.60% | ||
Unrecognized tax benefits | $ 3,339 | $ 4,342 | $ 4,342 | $ 3,678 | $ 3,339 |
Tax Cuts and Jobs Act, Change in Tax Rate, Income Tax Expense (Benefit) | (20,318) | ||||
Portion of unrecognized tax benefits that, if recognized, would favorably affect annual effective income tax rate | 2,012 | 1,765 | |||
Interest and penalties included in liability for uncertain tax positions | 562 | 477 | |||
Reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits | |||||
Unrecognized tax benefits at the beginning of the period | 3,339 | 4,342 | 4,746 | ||
Increases in tax positions for the current year | 1,164 | 448 | 394 | ||
Reductions in tax positions for lapse of statute of limitations | (576) | (751) | (793) | ||
Reductions in tax positions for settlements and payments | (249) | ||||
Decreases in prior period unrecognized tax benefits | (700) | (5) | |||
Unrecognized tax benefits at the end of the period | $ 3,678 | $ 3,339 | $ 4,342 | ||
Canada | |||||
Effective income tax rate differs from the statutory rate | |||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2031 | $ 617 | ||||
Spain | |||||
Effective income tax rate differs from the statutory rate | |||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2026 | 282 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2027 | 60 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2028 | 179 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2029 | 102 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2030 | 310 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2031 | 412 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2032 | 311 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2033 | 125 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2034 | 434 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2035 | 548 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2036 | 797 | ||||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2037 | $ 407 |
SHARE CAPITAL AND CAPITAL IN _3
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in share capital and capital in excess of par value | ||||
Balance at the beginning of the period | $ 750,497 | |||
Balance at the end of the period | $ 759,649 | $ 750,497 | ||
Treasury stock, shares | 90 | 88 | ||
Total Number of Shares Purchased | 923 | 594 | 921 | |
Average Price Paid Per Share (in dollars per share) | $ 36.93 | $ 32.48 | $ 37.01 | |
Stock dividends (as a percent) | 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 | $ 26,767 | $ 26,361 | $ 26,181 | |
Balance at the beginning of the period (in shares) | 38,544 | 37,960 | 37,701 | |
Issuance of 3% stock dividend | $ 798 | $ 781 | $ 781 | |
Issuance of 3% stock dividend (in shares) | 1,150 | 1,125 | 1,124 | |
Conversion of Class B common shares to common shares | $ 45 | $ 37 | $ 39 | |
Conversion of Class B common shares to common shares (in shares) | 65 | 53 | 56 | |
Purchase and retirement of common shares and other | $ (641) | $ (412) | $ (640) | |
Purchase and retirement of common shares and other (in shares) | (923) | (594) | (921) | |
Balance at the end of the period | $ 26,969 | $ 26,767 | $ 26,361 | |
Balance at the end of the period (in shares) | 38,836 | 38,544 | 37,960 | |
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 | 90 | 88 | 85 | 83 |
Capital in Excess of Par Value | ||||
Changes in share capital and capital in excess of par value | ||||
Balance at the beginning of the period | $ 696,535 | $ 656,752 | $ 646,768 | |
Issuance of 3% stock dividend | 32,999 | 58,688 | 43,477 | |
Purchase and retirement of common shares and other | (33,475) | (18,905) | (33,493) | |
Balance at the end of the period | 696,059 | 696,535 | 656,752 | |
Class B Common Stock | Common Stock. | ||||
Changes in share capital and capital in excess of par value | ||||
Balance at the beginning of the period | $ 17,767 | $ 17,285 | $ 16,820 | |
Balance at the beginning of the period (in shares) | 25,584 | 24,891 | 24,221 | |
Issuance of 3% stock dividend | $ 532 | $ 519 | $ 504 | |
Issuance of 3% stock dividend (in shares) | 768 | 746 | 726 | |
Conversion of Class B common shares to common shares | $ (45) | $ (37) | $ (39) | |
Conversion of Class B common shares to common shares (in shares) | (65) | (53) | (56) | |
Balance at the end of the period | $ 18,254 | $ 17,767 | $ 17,285 | |
Balance at the end of the period (in shares) | 26,287 | 25,584 | 24,891 |
OTHER INCOME, NET (Details)
OTHER INCOME, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OTHER INCOME, NET | |||
Interest and dividend income | $ 4,423 | $ 3,535 | $ 2,851 |
Gains (losses) on trading securities relating to deferred compensation plans | 11,292 | (1,103) | 9,977 |
Interest expense | (220) | (181) | (144) |
Foreign exchange gains (losses) | (533) | (659) | 259 |
Capital gains (losses) | 22 | (11) | 25 |
Miscellaneous, net | 1,206 | 1,143 | 1,171 |
Total other income, net | $ 16,190 | $ 2,724 | $ 14,139 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - Pension Plan [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Credited service period | 1 year | ||
Pension expense | $ 3,114 | $ 2,988 | $ 3,087 |
Employer contributions to profit sharing and retirement savings-investment plan | $ 2,858 | $ 2,734 | $ 2,512 |
EMPLOYEE BENEFIT PLANS - Multi-
EMPLOYEE BENEFIT PLANS - Multi-employer (Details) - Multi-employer defined benefit pension plan - USD ($) $ in Thousands | Jun. 12, 2012 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 |
Multiemployer Plans [Line Items] | |||||
Percentage of funded status | 51.60% | ||||
Employer contributions to multi-employer defined benefit pension plans | $ 2,943 | $ 2,836 | $ 2,603 | ||
Insolvent period | 20 years | ||||
Estimated liability upon withdrawal from plan | $ 99,800 | 81,600 | 82,200 | ||
Percentage of annual compounded surcharge for rehabilitation | 5.00% | ||||
Percentage of interim surcharge | 5.00% | ||||
Pension expense | $ 2,961 | 2,836 | 2,617 | ||
Surcharges | $ 948 | $ 811 | $ 656 |
EMPLOYEE BENEFIT PLANS - Deferr
EMPLOYEE BENEFIT PLANS - Deferred compensation (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Deferred compensation | ||
Number of deferred compensation plans | item | 3 | |
Trading securities | $ | $ 76,183 | $ 62,260 |
EMPLOYEE BENEFIT PLANS - Postre
EMPLOYEE BENEFIT PLANS - Postretirement (Details) - Postretirement benefit plans - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Postretirement benefit plan disclosure | |||
Assumed ultimate health care cost trend rate (as a percent) | 3.00% | ||
Accumulated benefit obligation after plan amendment | $ 13,743 | $ 12,451 | |
Amounts recognized in accumulated other comprehensive loss (pre-tax) | |||
Prior service credit | (3,066) | ||
Net actuarial gain | (808) | ||
Net amount recognized in accumulated other comprehensive loss | (3,874) | ||
Estimated amount to be amortized from accumulated other comprehensive loss (gain) into net periodic benefit cost during next fiscal year | |||
Actuarial gain | 123 | ||
Prior service credit | (1,227) | ||
Changes in the accumulated postretirement benefit obligation | |||
Benefit obligation, beginning of the period | 12,451 | 13,497 | |
Service cost | 270 | 337 | $ 323 |
Interest cost | 499 | 455 | 468 |
Actuarial (gain)/loss | 922 | (1,409) | |
Benefits paid | (399) | (429) | |
Benefit obligation, end of the period | 13,743 | 12,451 | 13,497 |
Net periodic postretirement benefit cost | |||
Service cost-benefits attributed to service during the period | 270 | 337 | 323 |
Interest cost on the accumulated postretirement benefit obligation | 499 | 455 | 468 |
Net amortization | (1,522) | (1,324) | (1,462) |
Net periodic postretirement benefit cost (income) | $ (753) | $ (532) | $ (671) |
EMPLOYEE BENEFIT PLANS - Expect
EMPLOYEE BENEFIT PLANS - Expected future benefit payments (Details) - Postretirement benefit plans $ in Thousands | Dec. 31, 2019USD ($) |
Estimated future benefit payments | |
2020 | $ 598 |
2021 | 614 |
2022 | 637 |
2023 | 677 |
2024 | 692 |
2025 through 2029 | $ 3,687 |
COMMITMENTS (Details)
COMMITMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
COMMITMENTS | |||
Rental expense | $ 1,032 | $ 793 | $ 785 |
Operating lease commitments, due 2020 | 979 | ||
Operating lease commitments, due 2021 | 540 | ||
Operating lease commitments, due 2022 | $ 61 |
SEGMENT AND GEOGRAPHIC INFORM_3
SEGMENT AND GEOGRAPHIC INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Revenue | $ 527,113 | $ 518,920 | $ 519,289 | ||||||||
Long-lived assets: | $ 188,455 | $ 186,101 | 188,455 | 186,101 | 178,972 | ||||||
United States | |||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Long-lived assets: | 155,428 | 151,770 | 155,428 | 151,770 | 145,210 | ||||||
Canada | |||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Long-lived assets: | 30,412 | 31,843 | 30,412 | 31,843 | 30,823 | ||||||
Mexico and Other | |||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Long-lived assets: | 2,615 | 2,488 | 2,615 | 2,488 | 2,939 | ||||||
Product | |||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Revenue | $ 134,663 | $ 181,913 | $ 106,021 | $ 101,019 | $ 127,264 | $ 181,505 | $ 105,623 | $ 100,859 | 523,616 | 515,251 | 515,674 |
Product | United States | |||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Revenue | 478,790 | 471,561 | 472,222 | ||||||||
Product | Canada, Mexico, and Other | |||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||
Revenue | $ 44,826 | $ 43,690 | $ 43,452 |
SEGMENT AND GEOGRAPHIC INFORM_4
SEGMENT AND GEOGRAPHIC INFORMATION - Concentration (Details) - item | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Wal-Mart | Net product sales | A major customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 24.20% | 24.10% | 24.00% |
Dollar Tree | Net product sales | A major customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 11.30% | 11.20% | 10.90% |
McLane | Net product sales | A major customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 17.70% | 17.40% | 16.90% |
Three Largest Customers | Accounts receivable | |||
Concentration of Risk | |||
Number of customers | 3 | 3 | |
Three Largest Customers | Accounts receivable | A major customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 30.00% | 31.00% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair value measurements | ||
Cash and cash equivalents | $ 138,960 | $ 110,899 |
Available for sale securities | 177,292 | 183,289 |
Trading securities | 76,183 | 62,260 |
Fair value measured on a recurring basis | ||
Fair value measurements | ||
Cash and cash equivalents | 138,960 | 110,899 |
Available for sale securities | 177,292 | 183,289 |
Trading securities | 76,183 | 62,260 |
Total assets measured at fair value | 392,570 | 355,454 |
Fair value measured on a recurring basis | Foreign currency forward contracts | ||
Fair value measurements | ||
Derivative instruments, net | 14 | (407) |
Fair value measured on a recurring basis | Commodity futures contracts | ||
Fair value measurements | ||
Derivative instruments, net | 121 | (587) |
Fair value measured on a recurring basis | Level 1 | ||
Fair value measurements | ||
Cash and cash equivalents | 138,960 | 110,899 |
Available for sale securities | 3,588 | 3,007 |
Trading securities | 48,260 | 36,753 |
Total assets measured at fair value | 190,929 | 150,072 |
Fair value measured on a recurring basis | Level 1 | Commodity futures contracts | ||
Fair value measurements | ||
Derivative instruments, net | 121 | (587) |
Fair value measured on a recurring basis | Level 2 | ||
Fair value measurements | ||
Available for sale securities | 173,704 | 180,282 |
Trading securities | 27,923 | 25,507 |
Total assets measured at fair value | 201,641 | 205,382 |
Fair value measured on a recurring basis | Level 2 | Foreign currency forward contracts | ||
Fair value measurements | ||
Derivative instruments, net | $ 14 | $ (407) |
FAIR VALUE MEASUREMENTS - Bonds
FAIR VALUE MEASUREMENTS - Bonds (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
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 |
FAIR VALUE MEASUREMENTS AFS (De
FAIR VALUE MEASUREMENTS AFS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available for Sale: | ||
Amortized Cost | $ 176,129 | $ 185,290 |
Fair Value | 177,292 | 183,289 |
Unrealized Gains | 1,163 | 28 |
Unrealized Losses | (2,029) | |
Municipal bonds | ||
Available for Sale: | ||
Amortized Cost | 6,173 | |
Fair Value | 5,123 | |
Unrealized Losses | (1,050) | |
Variable rate demand notes | ||
Available for Sale: | ||
Amortized Cost | 25,845 | 20,195 |
Fair Value | 25,845 | 20,195 |
Corporate bonds | ||
Available for Sale: | ||
Amortized Cost | 139,803 | 149,795 |
Fair Value | 140,797 | 148,863 |
Unrealized Gains | 994 | |
Unrealized Losses | (932) | |
Government securities | ||
Available for Sale: | ||
Amortized Cost | 3,503 | 2,979 |
Fair Value | 3,588 | 3,007 |
Unrealized Gains | 85 | 28 |
Certificates of deposit | ||
Available for Sale: | ||
Amortized Cost | 6,978 | 6,148 |
Fair Value | 7,062 | 6,101 |
Unrealized Gains | $ 84 | |
Unrealized Losses | $ (47) |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative contracts | |||
Assets | $ 219 | $ 92 | |
Liabilities | (84) | (1,086) | |
Derivatives designated as hedging instruments: | Foreign currency forward contracts | |||
Derivative contracts | |||
Notional Amounts | 5,533 | 11,050 | |
Assets | 14 | ||
Liabilities | (407) | ||
Derivatives designated as hedging instruments: | Commodity futures contracts | |||
Derivative contracts | |||
Notional Amounts | 7,147 | 9,580 | |
Assets | 205 | 92 | |
Liabilities | $ (84) | $ (679) | |
Forecast | |||
Derivative contracts | |||
Gain (loss) to be reclassified | $ (121) | ||
Forecast | Foreign currency forward contracts | |||
Derivative contracts | |||
Loss to be reclassified | $ (14) |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - OCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effect of derivative instruments on earnings | |||
Gain (Loss) Recognized in OCI | $ 451 | $ (2,734) | $ (1,410) |
Reclassified from Accumulated OCI into Earnings | |||
Effect of derivative instruments on earnings | |||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | (677) | (1,630) | |
Foreign currency forward contracts | |||
Effect of derivative instruments on earnings | |||
Gain (Loss) Recognized in OCI | 359 | (418) | |
Foreign currency forward contracts | Reclassified from Accumulated OCI into Earnings | |||
Effect of derivative instruments on earnings | |||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | (62) | 67 | |
Commodity futures contracts | |||
Effect of derivative instruments on earnings | |||
Gain (Loss) Recognized in OCI | 92 | (2,316) | |
Commodity futures contracts | Reclassified from Accumulated OCI into Earnings | |||
Effect of derivative instruments on earnings | |||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | $ (615) | $ (1,697) |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | $ 750,622 | |
Adoption of ASU 2018-02 | $ 2,726 | |
Balance at the end of the period | 759,854 | 750,622 |
Foreign Currency Translation | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (24,159) | (24,262) |
Other comprehensive earnings (loss) before reclassifications | 791 | 103 |
Other comprehensive earnings (loss) net of tax | 791 | 103 |
Balance at the end of the period | (23,368) | (24,159) |
Investments | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (1,516) | (889) |
Other comprehensive earnings (loss) before reclassifications | 2,372 | (459) |
Reclassifications from accumulated other comprehensive loss | 26 | |
Other comprehensive earnings (loss) net of tax | 2,398 | (459) |
Balance at the end of the period | 882 | (1,516) |
Investments | ASU 2018-02 | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Adoption of ASU 2018-02 | (168) | |
Foreign Currency Derivatives | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (309) | 51 |
Other comprehensive earnings (loss) before reclassifications | 272 | (318) |
Reclassifications from accumulated other comprehensive loss | 47 | (51) |
Other comprehensive earnings (loss) net of tax | 319 | (369) |
Balance at the end of the period | 10 | (309) |
Foreign Currency Derivatives | ASU 2018-02 | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Adoption of ASU 2018-02 | 9 | |
Commodity Derivatives | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (444) | 20 |
Other comprehensive earnings (loss) before reclassifications | 70 | (1,754) |
Reclassifications from accumulated other comprehensive loss | 466 | 1,286 |
Other comprehensive earnings (loss) net of tax | 536 | (468) |
Balance at the end of the period | 92 | (444) |
Commodity Derivatives | ASU 2018-02 | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Adoption of ASU 2018-02 | 4 | |
Postretirement and Pension Benefits | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | 4,206 | 3,289 |
Other comprehensive earnings (loss) before reclassifications | (914) | 1,172 |
Reclassifications from accumulated other comprehensive loss | (1,153) | (1,003) |
Other comprehensive earnings (loss) net of tax | (2,067) | 169 |
Balance at the end of the period | 2,139 | 4,206 |
Postretirement and Pension Benefits | ASU 2018-02 | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Adoption of ASU 2018-02 | 748 | |
Accumulated Other Comprehensive Earnings ( Loss ) | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (22,222) | (21,791) |
Other comprehensive earnings (loss) before reclassifications | 2,591 | (1,256) |
Reclassifications from accumulated other comprehensive loss | (614) | 232 |
Other comprehensive earnings (loss) net of tax | 1,977 | (1,024) |
Balance at the end of the period | $ (20,245) | (22,222) |
Accumulated Other Comprehensive Earnings ( Loss ) | ASU 2018-02 | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Adoption of ASU 2018-02 | $ 593 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassification from AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | $ (16,190) | $ (2,724) | $ (14,139) |
Cost of goods sold | 330,097 | 330,747 | 327,383 |
Total before tax | (85,404) | (73,206) | (84,561) |
Tax expense (benefit) | 20,565 | 16,401 | 3,907 |
Net of tax | (64,839) | (56,805) | $ (80,654) |
Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Total before tax | (811) | 306 | |
Tax expense (benefit) | 197 | (74) | |
Net of tax | (614) | 232 | |
Investments | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | 34 | ||
Foreign Currency Derivatives | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | 62 | (67) | |
Commodity Derivatives | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Cost of goods sold | $ 615 | $ 1,697 | |
Type of Cost, Good or Service [Extensible List] | Product [Member] | Product [Member] | |
Postretirement and Pension Benefits | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | $ (1,522) | $ (1,324) |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
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) |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 3 years | ||
Operating lease cost | $ 258 | $ 1,004 | |
Operating lease right-of-use assets | 1,580 | 1,580 | |
Operating lease liabilities | $ 1,580 | $ 1,580 | |
Weighted average remaining lease term | 1 year 7 months 6 days | 1 year 7 months 6 days | |
Weighted average discount rate | 3.10% | 3.10% | |
2020 | $ 979 | $ 979 | |
2021 | 540 | 540 | |
2022 | 61 | 61 | |
Property, plant and equipment, gross | 567,215 | 567,215 | $ 547,951 |
Lease income | $ 718 | $ 2,951 | |
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lessor, renewal term | 60 years | 60 years | |
Commercial real estate leased to third parties | |||
Lessee, Lease, Description [Line Items] | |||
Property, plant and equipment, gross | $ 36,378 | $ 36,378 | |
Depreciation | $ 10,252 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | $ 527,113 | $ 518,920 | $ 519,289 | ||||||||
Gross Margin | 197,016 | 188,173 | 191,906 | ||||||||
Net earnings attributable to Tootsie Roll Industries, Inc. | $ 14,555 | $ 29,854 | $ 11,556 | $ 8,955 | $ 12,175 | $ 26,104 | $ 10,489 | $ 8,125 | $ 64,920 | $ 56,893 | $ 80,864 |
Net earnings attributable to Tootsie Roll Industries, Inc. per share (in dollars per share) | $ 0.22 | $ 0.46 | $ 0.18 | $ 0.14 | $ 0.18 | $ 0.40 | $ 0.16 | $ 0.12 | $ 0.99 | $ 0.86 | $ 1.21 |
Stock dividends (as a percent) | 3.00% | 3.00% | 3.00% | ||||||||
Product | |||||||||||
Revenue | $ 134,663 | $ 181,913 | $ 106,021 | $ 101,019 | $ 127,264 | $ 181,505 | $ 105,623 | $ 100,859 | $ 523,616 | $ 515,251 | $ 515,674 |
Gross Margin | $ 49,229 | $ 69,046 | $ 40,076 | $ 36,163 | $ 45,945 | $ 66,259 | $ 38,142 | $ 35,025 | $ 194,514 | $ 185,371 | $ 189,263 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Description | |||
Balance at beginning of year | $ 5,712 | $ 5,190 | $ 4,201 |
Additions charged to expense | 11,251 | 9,783 | 10,247 |
Deductions | 10,029 | 9,261 | 9,258 |
Balance at End of Year | 6,934 | 5,712 | 5,190 |
Reserve for bad debts | |||
Description | |||
Balance at beginning of year | 1,128 | 1,197 | 1,225 |
Additions charged to expense | 676 | 38 | 27 |
Deductions | 467 | 107 | 55 |
Balance at End of Year | 1,337 | 1,128 | 1,197 |
Reserve for cash discounts | |||
Description | |||
Balance at beginning of year | 692 | 724 | 659 |
Additions charged to expense | 9,482 | 9,122 | 9,268 |
Deductions | 9,562 | 9,154 | 9,203 |
Balance at End of Year | 612 | 692 | 724 |
Deferred tax asset valuation | |||
Description | |||
Balance at beginning of year | 3,892 | 3,269 | 2,317 |
Additions charged to expense | 1,093 | 623 | 952 |
Balance at End of Year | $ 4,985 | $ 3,892 | $ 3,269 |