Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 13, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
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 | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Central Index Key | 0000098677 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Public Float | $ 611,433,000 | ||
Auditor Name | Grant Thornton LLP | ||
Auditor Firm ID | 248 | ||
Auditor Location | Chicago, Illinois | ||
Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 39,684,473 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 28,606,918 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | $ 686,970 | $ 570,776 | $ 471,063 |
Costs | 454,239 | 371,535 | 300,702 |
Gross Margin | 232,731 | 199,241 | 170,361 |
Selling, marketing and administrative expenses | 121,976 | 132,108 | 112,117 |
Earnings from operations | 110,755 | 67,133 | 58,244 |
Other income (expense), net | (12,614) | 18,596 | 18,018 |
Earnings before income taxes | 98,141 | 85,729 | 76,262 |
Provision for income taxes | 22,249 | 20,421 | 17,288 |
Net earnings | 75,892 | 65,308 | 58,974 |
Less: net earnings (loss) attributable to noncontrolling interests | (45) | (18) | (21) |
Net earnings attributable to Tootsie Roll Industries, Inc. | $ 75,937 | $ 65,326 | $ 58,995 |
Net earnings attributable to Tootsie Roll Industries, Inc. per share (in dollars per share) | $ 1.10 | $ 0.94 | $ 0.84 |
Average number of shares outstanding (in shares) | 68,829 | 69,438 | 70,488 |
Product | |||
Revenue | $ 681,440 | $ 566,043 | $ 467,427 |
Costs | 452,552 | 370,105 | 299,710 |
Gross Margin | 228,888 | 195,938 | 167,717 |
Rental and Royalty | |||
Revenue | 5,530 | 4,733 | 3,636 |
Costs | 1,687 | 1,430 | 992 |
Gross Margin | $ 3,843 | $ 3,303 | $ 2,644 |
CONSOLIDATED STATEMENTS OF EA_2
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS | |||
Retained earnings at beginning of period | $ 39,545 | $ 32,312 | $ 40,809 |
Net earnings attributable to Tootsie Roll Industries, Inc. | 75,937 | 65,326 | 58,995 |
Cash dividends | (24,571) | (24,061) | (23,739) |
Stock dividends | (42,635) | (34,032) | (43,753) |
Retained earnings at end of period | $ 48,276 | $ 39,545 | $ 32,312 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS | |||
Net earnings | $ 75,892 | $ 65,308 | $ 58,974 |
Other comprehensive income (loss), before tax: | |||
Foreign currency translation adjustments | 1,087 | (301) | (1,213) |
Pension and postretirement reclassification adjustments: | |||
Unrealized gains (losses) for the period on postretirement and pension benefits | 3,338 | 448 | 467 |
Less: reclassification adjustment for (gains) losses to net earnings | (826) | (1,405) | (1,349) |
Unrealized gains (losses) on postretirement and pension benefits | 2,512 | (957) | (882) |
Investments: | |||
Unrealized gains (losses) for the period on investments | (9,909) | (4,227) | 1,463 |
Less: reclassification adjustment for (gains) losses to net earnings | (16) | (96) | |
Unrealized gains (losses) on investments | (9,925) | (4,323) | 1,463 |
Derivatives: | |||
Unrealized gains (losses) for the period on derivatives | (251) | 1,423 | 1,259 |
Less: reclassification adjustment for (gains) losses to net earnings | (570) | (2,593) | 325 |
Unrealized gains (losses) on derivatives | (821) | (1,170) | 1,584 |
Total other comprehensive income (loss), before tax | (7,147) | (6,751) | 952 |
Income tax benefit (expense) related to items of other comprehensive income | 1,991 | 1,553 | (522) |
Total comprehensive earnings | 70,736 | 60,110 | 59,404 |
Comprehensive earnings (loss) attributable to noncontrolling interests | (45) | (18) | (21) |
Total comprehensive earnings attributable to Tootsie Roll Industries, Inc. | $ 70,781 | $ 60,128 | $ 59,425 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 53,270 | $ 105,840 |
Restricted cash | 365 | 386 |
Investments | 96,128 | 39,968 |
Accounts receivable trade, less allowances of $2,335 and $2,281 | 58,556 | 54,921 |
Other receivables | 4,299 | 3,920 |
Inventories: | ||
Finished goods and work-in-process | 43,595 | 31,431 |
Raw materials and supplies | 40,671 | 24,074 |
Prepaid expenses | 12,144 | 7,761 |
Total current assets | 309,028 | 268,301 |
PROPERTY, PLANT AND EQUIPMENT, at cost: | ||
Land | 21,715 | 21,704 |
Buildings | 142,462 | 130,158 |
Machinery and equipment | 467,977 | 446,777 |
Construction in progress | 4,325 | 15,344 |
Operating lease right-of-use assets | 4,703 | 7,419 |
Property, plant and equipment, gross | 641,182 | 621,402 |
Less - accumulated depreciation | 429,139 | 412,496 |
Net property, plant and equipment | 212,043 | 208,906 |
OTHER ASSETS: | ||
Goodwill | 73,237 | 73,237 |
Trademarks | 175,024 | 175,024 |
Investments | 247,528 | 291,175 |
Prepaid expenses and other assets | 465 | 603 |
Deferred income taxes | 1,454 | 1,372 |
Total other assets | 497,708 | 541,411 |
Total assets | 1,018,779 | 1,018,618 |
CURRENT LIABILITIES: | ||
Accounts payable | 25,246 | 14,969 |
Bank loans | 1,051 | 939 |
Dividends payable | 6,154 | 6,042 |
Accrued liabilities | 54,444 | 53,896 |
Postretirement health care benefits | 658 | 616 |
Operating lease liabilities | 791 | 1,072 |
Income taxes payable | 1,790 | 2,434 |
Total current liabilities | 90,134 | 79,968 |
NONCURRENT LIABILITIES: | ||
Deferred income taxes | 45,005 | 45,461 |
Postretirement health care benefits | 9,303 | 12,619 |
Industrial development bonds | 7,500 | 7,500 |
Liability for uncertain tax positions | 3,747 | 3,415 |
Operating lease liabilities | 3,952 | 6,347 |
Deferred compensation and other liabilities | 76,256 | 94,511 |
Total noncurrent liabilities | 145,763 | 169,853 |
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | ||
Capital in excess of par value | 719,606 | 709,880 |
Retained earnings | 48,276 | 39,545 |
Accumulated other comprehensive loss | (30,169) | (25,013) |
Treasury stock (at cost) - 99 and 96 shares, respectively | (1,992) | (1,992) |
Total Tootsie Roll Industries, Inc. shareholders' equity | 783,171 | 769,042 |
Noncontrolling interests | (289) | (245) |
Total equity | 782,882 | 768,797 |
Total liabilities and shareholders' equity | 1,018,779 | 1,018,618 |
Common Stock | ||
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | ||
Common stock, value | 27,584 | 27,322 |
Class B Common Stock | ||
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY: | ||
Common stock, value | $ 19,866 | $ 19,300 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Trade accounts receivable, allowances | $ 2,335 | $ 2,281 |
Treasury stock, shares | 99,000 | 96,000 |
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 | 39,721 | 39,344 |
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 | 28,607 | 27,793 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net earnings | $ 75,892 | $ 65,308 | $ 58,974 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation | 17,668 | 17,570 | 18,184 |
Deferred income taxes | 1,535 | (1,263) | (279) |
Amortization of marketable security premiums | 5,531 | 3,837 | 1,404 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (3,073) | (14,130) | 3,483 |
Other receivables | (1,020) | (706) | 636 |
Inventories | (28,415) | 3,940 | (770) |
Prepaid expenses and other assets | 49 | 2,622 | 2,961 |
Accounts payable and accrued liabilities | 10,329 | 10,010 | 3,849 |
Income taxes payable | (4,565) | (1,296) | 3,012 |
Postretirement health care benefits | (804) | (1,281) | (1,041) |
Deferred compensation and other liabilities | (1,076) | 687 | (15,703) |
Net cash provided by operating activities | 72,051 | 85,298 | 74,710 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Capital expenditures | (23,356) | (31,426) | (17,970) |
Repayment of premiums on split dollar life insurance policies | 2,514 | 23,527 | |
Purchases of trading securities | (1,543) | (2,668) | (3,183) |
Sales of trading securities | 2,806 | 968 | 18,058 |
Purchase of available for sale securities | (96,114) | (108,576) | (109,816) |
Sale and maturity of available for sale securities | 49,618 | 47,289 | 98,885 |
Net cash (used in) provided by investing activities | (68,589) | (91,899) | 9,501 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Shares purchased and retired | (31,910) | (30,184) | (32,055) |
Dividends paid in cash | (24,629) | (24,136) | (23,810) |
Proceeds from bank loans | 3,989 | 3,792 | 3,902 |
Repayment of bank loans | (3,850) | (3,618) | (3,883) |
Net cash used in financing activities | (56,400) | (54,146) | (55,846) |
Effect of exchange rate changes on cash | 347 | (283) | (449) |
Increase (decrease) in cash and cash equivalents | (52,591) | (61,030) | 27,916 |
Cash, cash equivalents and restricted cash at beginning of year | 106,226 | 167,256 | 139,340 |
Cash, cash equivalents and restricted cash at end of year | 53,635 | 106,226 | 167,256 |
Supplemental cash flow information: | |||
Income taxes paid | 23,884 | 22,855 | 14,503 |
Interest paid | 78 | 6 | 57 |
Stock dividend issued | $ 70,242 | $ 64,667 | $ 63,402 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
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. 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 centers, 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 $67,342, $55,289, and $42,593 in 2022, 2021 and 2020, respectively, are included in selling, marketing and administrative expenses. A minor amount of royalty income (less than 0.1% 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 its 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, the Company capitalized 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 the Company’s 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 the Company has 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 $5,191 and $4,577 of cash held by it is foreign subsidiaries, principally foreign branches of a U.S. bank (Bank of America), at December 31, 2022 and 2021, respectively. The Company's cash in its foreign bank accounts is also not fully insured. Investments: Investments consist of various marketable securities principally corporate bonds, with maturities of generally from three The Company regularly reviews its investments to determine whether fair value is less than carrying value and, when necessary, makes qualitative assessments considering impairment indicators to evaluate whether investments are impaired. If impaired, the cost basis of the security is written down to fair value. Further information regarding the fair value of the Company’s investments is included in Note 9 of the Company’s Notes to Consolidated Financial Statements. Derivative instruments and hedging activities: 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 10 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 ($77,083 and $51,355 at December 31, 2022 and 2021, respectively) has been determined by the last-in, first-out (LIFO) method. The excess of current cost over LIFO cost of inventories approximates $34,898 and $21,348 at December 31, 2022 and 2021, respectively. The cost of certain foreign inventories ($7,183 and $4,150 at December 31, 2022 and 2021 respectively) has been determined by the first-in, first-out (FIFO) method. Rebates, discounts and other cash consideration received from vendors related to inventory purchases is reflected as a reduction in the cost of the related inventory item, and is, therefore, reflected in cost of sales when the related inventory item is sold. Property, plant and equipment: Depreciation is computed for financial reporting purposes by use of the straight-line method based on useful lives of 20 to 50 years for buildings and 5 to 20 years for machinery and equipment. Depreciation expense was $17,668, $17,570 and $18,184 in 2022, 2021 and 2020, respectively. Carrying value of long-lived assets: The Company reviews long-lived assets to determine if there are events or circumstances indicating that the amount of the asset reflected in the Company’s balance sheet may not be recoverable. When such indicators are present, the Company compares the carrying value of the long-lived asset, or asset group, to the future undiscounted cash flows of the underlying assets to determine if impairment exists. If applicable, an impairment charge would be recorded to write down the carrying value to its fair value. The determination of fair value involves the use of estimates of future cash flows that involve considerable management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance, and economic conditions. No impairment charges of long-lived assets were recorded by the Company during 2022, 2021 or 2020. 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 provided split dollar life benefits to an executive officer. The Company recorded 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. During 2021, the Company received $2,514 of previously paid premiums on these insurance policies which was recorded as a reduction to this asset and has now fully recovered all the premiums under the terms of the plan. No premiums were paid in 2022, 2021 or 2020. 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 2022, 2021 or 2020. 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 2022 and 2021, the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance. For the fair value assessment of certain trademarks where the “step-zero” analysis was not considered appropriate, impairment testing was performed in fourth quarter 2022 and 2021 using discounted cash flows and estimated royalty rates. For these trademarks, holding all other assumptions constant at the test date in 2022, 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 13% and 10%, respectively. Individually, a 100 basis point increase in the discount rate or a 100 basis point decrease in the royalty rate would not result in a potential impairment as of December 31, 2022. 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. The Company periodically reviews assumptions and estimates of the Company’s probable tax obligations and effects on its liability for uncertain tax positions, using informed judgment which may include the use of third-party consultants, advisors and legal counsel, as well as historical experience. Further information regarding 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 $5,000 contribution to the VEBA trust in 2022 but no contributions were made to the trust in 2021 or 2020. The Company will continue using the VEBA trust funds to pay the actual cost of such benefits through most or possibly all of 2023. At December 31, 2022 and 2021, the VEBA trust held $3,879 and $3,941, 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, 2022 and 2021 was 3.1% and 3.1%, 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: As of the date of this report, there are no recent accounting pronouncements that have not yet been adopted that Management believes would have a material impact on the Company’s consolidated financial statements. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | NOTE 2—ACCRUED LIABILITIES: Accrued liabilities are comprised of the following: December 31, 2022 2021 Compensation $ 12,801 $ 10,865 Other employee benefits 6,893 8,640 Taxes, other than income 4,078 3,574 Advertising and promotions 21,220 22,547 Other 9,452 8,270 $ 54,444 $ 53,896 |
INDUSTRIAL DEVELOPMENT BONDS
INDUSTRIAL DEVELOPMENT BONDS | 12 Months Ended |
Dec. 31, 2022 | |
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 1.3% and 0.7% in 2022 and 2021, respectively. See Note 9 of the Company’s Notes to Consolidated Financial Statements for fair value disclosures. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE 4—INCOME TAXES: The domestic and foreign components of pretax income are as follows: 2022 2021 2020 Domestic $ 84,286 $ 77,434 $ 69,211 Foreign 13,855 8,295 7,051 $ 98,141 $ 85,729 $ 76,262 The provision for income taxes is comprised of the following: 2022 2021 2020 Current: Federal $ 13,070 $ 16,886 $ 14,831 Foreign 4,110 1,983 1,029 State 2,605 2,822 1,763 19,785 21,691 17,623 Deferred: Federal 2,364 (2,069) (1,006) Foreign 81 39 1,316 State 19 760 (645) 2,464 (1,270) (335) $ 22,249 $ 20,421 $ 17,288 Significant components of the Company’s net deferred tax liability at year end were as follows: December 31, 2022 2021 Deferred tax assets: Accrued customer promotions $ 1,269 $ 2,107 Deferred compensation 17,533 22,311 Postretirement benefits 2,466 3,324 Other accrued expenses 7,744 5,158 Foreign subsidiary tax loss carry forward 4,650 4,497 Outside basis difference in foreign subsidiary 359 365 Capitalized research and development costs 2,049 — Deductible state tax depreciation 893 736 Tax credit carry forward 2,047 2,517 39,010 41,015 Valuation allowances (5,703) (5,555) Total deferred tax assets $ 33,307 $ 35,460 Deferred tax liabilities: Depreciation $ 27,153 $ 23,342 Deductible goodwill and trademarks 37,608 38,255 Accrued export company commissions 4,580 4,615 Employee benefit plans 395 525 Inventory reserves 934 2,532 Prepaid insurance 1,016 965 Unrealized capital gains (160) 3,874 Deferred foreign exchange gain 119 132 Deferred gain on sale of real estate 5,213 5,309 Total deferred tax liabilities $ 76,858 $ 79,549 Net deferred tax liability $ 43,551 $ 44,089 At December 31, 2022, the Company has benefits related to state tax credit carry-forwards expiring by year as follows: $50 in 2028, $130 in 2029, $212 in 2030, $225 in 2031, $238 in 2032, $211 in 2033, $235 in 2034, $274 in 2035, $235 in 2036 and $237 in 2037. The Company expects that not all the credits will be utilized before their expiration and has provided a valuation allowance for the estimated amounts that will expire. Such valuation allowances were $1,053 and $924 at December 31, 2022 and 2021, respectively. At December 31, 2022, the amounts of the Company’s Spanish subsidiary loss carry-forwards expiring by year are as follows: $270 in 2026, $57 in 2027, $171 in 2028, $98 in 2029, $296 in 2030, $394 in 2031, $297 in 2032, $120 in 2033, $415 in 2034, $524 in 2035, $761 in 2036, $388 in 2037, $186 in 2038, $151 in 2039 and $369 in 2040. A full valuation allowance has been provided for all of 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: 2022 2021 2020 U.S. statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net 2.3 2.4 2.1 Foreign income tax rates 1.0 0.2 1.0 Income tax credits and adjustments (0.8) (0.6) (1.4) Adjustment of deferred tax balances (0.7) 0.6 (0.2) Reserve for uncertain tax benefits 0.3 — (0.8) Other, net (0.4) 0.2 1.0 Effective income tax rate 22.7 % 23.8 % 22.7 % As a result of the 2017 Tax Cuts and Jobs Act, the Company does not assert permanent reinvestment of its foreign subsidiaries earnings. At December 31, 2022 and 2021, the Company had unrecognized tax benefits of $3,392 and $3,133, respectively. Included in this balance is $1,734 and $1,547, respectively, of unrecognized tax benefits that, if recognized, would favorably affect the annual effective income tax rate. As of December 31, 2022 and 2021, $355 and $282, 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: 2022 2021 2020 Unrecognized tax benefits at January 1 $ 3,133 $ 3,011 $ 3,678 Increases in tax positions for the current year 393 700 377 Reductions in tax positions for lapse of statute of limitations (134) (578) (501) Reductions in tax positions for settlements and payments — — (308) Increases (decreases) in prior period unrecognized tax benefits due to change in judgment — — (235) Unrecognized tax benefits at December 31 $ 3,392 $ 3,133 $ 3,011 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, primarily Canada and Mexico. The Company generally remains subject to examination by U.S. federal, state and foreign tax authorities for the years 2019 through 2021. With few exceptions, the Company is no longer subject to examinations by tax authorities for the years 2018 and prior. |
SHARE CAPITAL AND CAPITAL IN EX
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE | 12 Months Ended |
Dec. 31, 2022 | |
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 December 31, 2019 38,836 26,969 26,287 18,254 90 (1,992) 696,059 Issuance of 3% stock dividend 1,157 804 787 547 3 — 42,244 Conversion of Class B common shares to common shares 62 43 (62) (43) — — — Purchase and retirement of common shares (982) (682) — — — — (31,373) Balance at December 31, 2020 39,073 27,134 27,012 18,758 93 (1,992) 706,930 Issuance of 3% stock dividend 1,163 807 810 562 3 — 32,495 Conversion of Class B common shares to common shares 29 20 (29) (20) — — — Purchase and retirement of common shares (921) (639) — — — — (29,545) Balance at December 31, 2021 39,344 27,322 27,793 19,300 96 (1,992) 709,880 Issuance of 3% stock dividend 1,176 817 833 579 3 — 41,068 Conversion of Class B common shares to common shares 19 13 (19) (13) — — — Purchase and retirement of common shares (818) (568) — — — — (31,342) Balance at December 31, 2022 39,721 $ 27,584 28,607 $ 19,866 99 $ (1,992) $ 719,606 Average shares outstanding and all per share amounts included in the financial statements and notes thereto have been adjusted retroactively to reflect annual three percent stock dividends. While the Company does not have a formal or publicly announced Company common stock purchase program, the Company’s board of directors periodically authorizes a dollar amount for such share purchases. Based upon this policy, shares were purchased and retired as follows: Total Number of Shares Year Purchased (000’s) Average Price Paid Per Share 2022 818 $ 38.98 2021 921 $ 32.76 2020 982 $ 32.59 |
OTHER INCOME, NET
OTHER INCOME, NET | 12 Months Ended |
Dec. 31, 2022 | |
OTHER INCOME, NET | |
OTHER INCOME, NET | NOTE 6—OTHER INCOME, NET: Other income, net is comprised of the following: 2022 2021 2020 Interest and dividend income $ 2,641 $ 2,740 $ 4,005 Gains (losses) on trading securities relating to deferred compensation plans (17,263) 14,207 12,519 Interest expense (104) (46) (164) Foreign exchange gains 1,307 667 534 Capital gains (losses) 121 (286) (6) Miscellaneous, net 684 1,314 1,130 $ (12,614) $ 18,596 $ 18,018 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | NOTE 7—EMPLOYEE BENEFIT PLANS: Pension plans: The Company sponsors a defined contribution pension plan 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 expense for this plan for 2022, 2021 and 2020 approximated $2,682, $3,010 and $2,772, respectively. The Company also maintains certain defined contribution 401K profit sharing and retirement plans. Company contributions in 2022, 2021 and 2020 to these plans were $3,265, $3,201 and $2,766 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 (Plan) Employer Identification Number and plan number: 52-6118572, plan number 001 Funded Status as of the most recent year available: 48.50% funded as of January 1, 2021 The Company’s contributions to such plan: $3,508, $3,118 and $2,850 in 2022, 2021 and 2020, respectively Plan status: Critical and declining for the plan year beginning January 1, 2022 (most recent date information is available) Beginning in 2012, the Company has received periodic notices from the Plan, a multi-employer defined benefit pension plan for certain Company union employees, that the Plan’s actuary certified the Plan to be in “critical status”, as defined by the Pension Protection Act (PPA) and the Pension Benefit Guaranty Corporation (PBGC); and that a plan of rehabilitation was adopted by the trustees of the Plan in 2012. Beginning in 2015, the Plan was reclassified to “critical and declining status”, as defined by the PPA and PBGC, for the plan year beginning January 1, 2015. A designation of “critical and declining status” implies that the Plan is expected to become insolvent in the next 20 years. In 2016, the Company received new notices that the Plan’s trustees adopted an updated Rehabilitation Plan effective January 1, 2016, and all annual notices through 2021 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 $104,300, $99,300 and $99,800 if it had withdrawn from the Plan during 2021, 2020 and 2019 respectively. The Plan will not have updated actuarial and withdrawal liability information until second quarter 2023. 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. In fourth quarter 2020, the Plan Trustees advised the Company that the surcharges would no longer increase and therefore be “frozen” at the rates and amounts in effect as of December 31, 2020 provided that the local bargaining union and the Company executed a formal consenting agreement by March 31, 2021. During first quarter 2021, the local bargaining union and the Company executed this agreement which resulted in the “freezing” of such surcharges as of December 31, 2020. The Company’s pension expense for this Plan for 2022, 2021 and 2020 was $3,510, $3,156 and $2,866, respectively. The aforementioned expense includes surcharges of $1,237, $1,112 and $1,010 in 2022, 2021 and 2020, 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, 2022 and 2021, these investments totaled $71,208 and $89,736, 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 $9,961 and $13,235 at December 31, 2022 and 2021, respectively. Amounts recognized in accumulated other comprehensive loss (pre-tax) at December 31, 2022 are as follows: Prior service credit $ — Net actuarial gain (4,452) Net amount recognized in accumulated other comprehensive loss $ (4,452) The changes in the accumulated postretirement benefit obligation at December 31, 2022 and 2021 consist of the following: December 31, 2022 2021 Benefit obligation, beginning of year $ 13,235 $ 13,487 Service cost 241 270 Interest cost 336 291 Actuarial (gain)/loss (3,323) (326) Benefits paid (528) (487) Benefit obligation, end of year $ 9,961 $ 13,235 The actuarial (gain) in 2022 is attributable to an increase in the discount rate, resulting in a (gain). The actuarial (gain) in 2021 is attributable to an increase in the discount rate, resulting in a (gain), partially offset by updated mortality projections for the year ended December 31, 2021, resulting in a loss. Net periodic postretirement benefit cost (income) included the following components: 2022 2021 2020 Service cost—benefits attributed to service during the period $ 241 $ 270 $ 288 Interest cost on the accumulated postretirement benefit obligation 336 291 403 Net amortization (826) (1,405) (1,349) Net periodic postretirement benefit cost (income) $ (249) $ (844) $ (658) The Company estimates future benefit payments will be $658, $663, $677, $688 and $696 in each year beginning in 2023 through 2027, respectively, and a total of $3,543 in 2028 through 2032. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
SEGMENT AND GEOGRAPHIC INFORMATION | NOTE 8—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: 2022 2021 2020 Net product sales: United States $ 622,817 $ 514,437 $ 431,024 Canada, Mexico and Other 58,623 51,606 36,403 $ 681,440 $ 566,043 $ 467,427 Long-lived assets: United States $ 182,393 $ 178,936 $ 155,664 Canada 25,715 27,051 28,765 Mexico and Other 3,935 2,919 2,899 $ 212,043 $ 208,906 $ 187,328 Sales revenues from Wal-Mart Stores, Inc. aggregated approximately 23.0%, 22.7%, and 23.5% of net product sales during the year ended December 31, 2022, 2021 and 2020, respectively. Sales revenues from Dollar Tree, Inc. (which includes Family Dollar which was acquired by Dollar Tree) aggregated approximately 12.4%, 12.1%, and 11.7% of net product sales during the year ended December 31, 2022, 2021 and 2020, 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 20.4% in 2022 and 21.0% in 2021 and 22.1% in 2020. At December 31, 2022 and 2021, the Company’s three largest customers discussed above accounted for approximately 37% and 36% of total accounts receivable, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 9—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, 2022 and 2021, 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 bonds and variable rate demand notes. The fair value of the Company’s industrial revenue development bonds at December 31, 2022 and 2021 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. The following tables present information about the Company’s financial assets and liabilities measured at fair value as of December 31, 2022 and 2021, and indicate the fair value hierarchy and the valuation techniques utilized by the Company to determine such fair value: Estimated Fair Value December 31, 2022 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 53,270 $ 53,270 $ — $ — Available for sale securities 272,448 1,889 270,559 — Foreign currency derivatives (282) — (282) — Commodity derivatives 10 10 — — Trading securities 71,208 56,049 15,159 — Total assets measured at fair value $ 396,654 $ 111,218 $ 285,436 $ — Estimated Fair Value December 31, 2021 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 105,840 $ 105,840 $ — $ — Available for sale securities 241,407 1,282 240,125 — Foreign currency derivatives 426 — 426 — Commodity derivatives 124 124 — — Trading securities 89,736 76,196 13,540 — Total assets measured at fair value $ 437,533 $ 183,442 $ 254,091 $ — Available for sale securities which utilize Level 2 inputs consist primarily of corporate 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, 2022 Amortized Fair Unrealized Available for Sale: Cost Value Gains Losses Municipal bonds $ 41 $ 40 $ — $ (1) Variable rate demand notes 4,800 4,800 — — Corporate bonds 276,148 264,575 — (11,573) Government securities 1,924 1,889 — (35) Certificates of deposit 1,157 1,144 — (13) $ 284,070 $ 272,448 $ — $ (11,622) December 31, 2021 Amortized Fair Unrealized Available for Sale: Cost Value Gains Losses Municipal bonds $ 542 $ 536 $ — $ (6) Variable rate demand notes — — — — Corporate bonds 238,045 236,332 — (1,713) Government securities 1,271 1,282 11 — Certificates of deposit 3,246 3,257 11 — $ 243,104 $ 241,407 $ 22 $ (1,719) |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 10—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. As of December 31, 2022 and 2021, all derivative instruments are accounted for using hedge accounting. 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 $10 of this accumulated comprehensive gain is expected to be charged to earnings in 2023. Approximately $282 in accumulated other comprehensive loss for foreign currency derivatives is expected to be reclassified to other income, net in 2023. The following table summarizes the Company’s outstanding derivative contracts and their effects on its Consolidated Statements of Financial Position at December 31, 2022 and 2021: December 31, 2022 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency derivatives $ 7,264 $ — $ (282) Commodity derivatives 189 10 — Total derivatives $ 10 $ (282) December 31, 2021 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency derivatives $ 6,729 $ 426 $ — Commodity derivatives 6,012 231 (107) Total derivatives $ 657 $ (107) The effects of derivative instruments on the Company’s Consolidated Statement of Earnings, Comprehensive Earnings and Retained Earnings for year ended December 31, 2022 and 2021 are as follows: For Year Ended December 31, 2022 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 derivatives $ (484) $ 223 $ — Commodity derivatives 233 347 — Total $ (251) $ 570 $ — For Year Ended December 31, 2021 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 derivatives $ 93 $ 445 $ — Commodity derivatives 1,330 2,148 — Total $ 1,423 $ 2,593 $ — |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2022 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE 11—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, 2020 $ (24,581) $ 1,992 $ 589 $ 713 $ 1,472 $ (19,815) Other comprehensive earnings (loss) before reclassifications (301) (3,205) 70 1,009 332 (2,095) Reclassifications from accumulated other comprehensive loss — (73) (337) (1,628) (1,065) (3,103) Other comprehensive earnings (loss) net of tax (301) (3,278) (267) (619) (733) (5,198) Balance at December 31, 2021 $ (24,882) $ (1,286) $ 322 $ 94 $ 739 $ (25,013) Other comprehensive earnings (loss) before reclassifications 1,087 (7,511) (368) 177 2,529 (4,086) Reclassifications from accumulated other comprehensive loss — (12) (169) (263) (626) (1,070) Other comprehensive earnings (loss) net of tax 1,087 (7,523) (537) (86) 1,903 (5,156) Balance at December 31, 2022 $ (23,795) $ (8,809) $ (215) $ 8 $ 2,642 $ (30,169) 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, 2022 December 31, 2021 Location of (Gain) Loss Recognized in Earnings Investments $ (16) $ (96) Other income, net Foreign currency derivatives (223) (445) Other income, net Commodity derivatives (347) (2,148) Product cost of goods sold Postretirement and pension benefits (826) (1,405) Other income, net Total before tax (1,412) (4,094) Tax expense (benefit) 342 991 Net of tax $ (1,070) $ (3,103) |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 12—GOODWILL AND INTANGIBLE ASSETS: All of the Company’s intangible indefinite-lived assets are trademarks. The changes in the carrying amount of trademarks for 2022 and 2021 were as follows: 2022 2021 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, 2022 | |
LEASES | |
LEASES | NOTE 13—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 19 years . As of December 31, 2022 and 2021, operating lease right-of-use assets were $4,703 and $7,419 , respectively, and operating lease liabilities . The weighted-average remaining lease term related to these operating leases was 15.9 years and 16.9 years as of December 31, 2022 and 2021, respectively. The weighted-average discount rate related to the Company’s operating leases was 3.3% and 2.3% as of December 31, 2022 and 2021, respectively. Maturities of operating lease liabilities at December 31, 2022 are as follows: . The Company, as lessor, rents certain commercial real estate to third party lessees. The December 31, 2022 and 2021 cost related to these leased properties was $51,370 and $51,384 , respectively, and the accumulated depreciation related to these leased properties was $16,903 and $15,844 , respectively. Terms of certain such leases, including renewal options, may be extended for up to approximately fifty-eight 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 the twelve months of 2022 and 2021 was $4,934 and $4,223 , respectively, and is classified in cash flows from operating activities. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS (in thousands) DECEMBER 31, 2022, 2021 and 2020 Additions (reductions) Balance at charged Balance at beginning (credited) to End of Description of year expense Deductions(1) Year 2022: Reserve for bad debts $ 1,392 $ 34 $ 12 $ 1,414 Reserve for cash discounts 889 12,153 12,121 921 Deferred tax asset valuation 5,555 148 — 5,703 $ 7,836 $ 12,335 $ 12,133 $ 8,038 2021: Reserve for bad debts $ 1,108 $ 418 $ 134 $ 1,392 Reserve for cash discounts 586 10,153 9,850 889 Deferred tax asset valuation 5,593 (38) — 5,555 $ 7,287 $ 10,533 $ 9,984 $ 7,836 2020: Reserve for bad debts $ 1,337 $ 123 $ 352 $ 1,108 Reserve for cash discounts 612 8,504 8,530 586 Deferred tax asset valuation 4,985 608 — 5,593 $ 6,934 $ 9,235 $ 8,882 $ 7,287 (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, 2022 | |
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. 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 centers, 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 $67,342, $55,289, and $42,593 in 2022, 2021 and 2020, respectively, are included in selling, marketing and administrative expenses. A minor amount of royalty income (less than 0.1% 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 its 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, the Company capitalized 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 the Company’s 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 the Company has 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 $5,191 and $4,577 of cash held by it is foreign subsidiaries, principally foreign branches of a U.S. bank (Bank of America), at December 31, 2022 and 2021, respectively. The Company's cash in its foreign bank accounts is also not fully insured. |
Investments | Investments: Investments consist of various marketable securities principally corporate bonds, with maturities of generally from three The Company regularly reviews its investments to determine whether fair value is less than carrying value and, when necessary, makes qualitative assessments considering impairment indicators to evaluate whether investments are impaired. If impaired, the cost basis of the security is written down to fair value. Further information regarding the fair value of the Company’s investments is included in Note 9 of the Company’s Notes to Consolidated Financial Statements. |
Derivative instruments and hedging activities | Derivative instruments and hedging activities: 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 10 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 ($77,083 and $51,355 at December 31, 2022 and 2021, respectively) has been determined by the last-in, first-out (LIFO) method. The excess of current cost over LIFO cost of inventories approximates $34,898 and $21,348 at December 31, 2022 and 2021, respectively. The cost of certain foreign inventories ($7,183 and $4,150 at December 31, 2022 and 2021 respectively) has been determined by the first-in, first-out (FIFO) method. Rebates, discounts and other cash consideration received from vendors related to inventory purchases is reflected as a reduction in the cost of the related inventory item, and is, therefore, reflected in cost of sales when the related inventory item is sold. |
Property, plant and equipment | Property, plant and equipment: Depreciation is computed for financial reporting purposes by use of the straight-line method based on useful lives of 20 to 50 years for buildings and 5 to 20 years for machinery and equipment. Depreciation expense was $17,668, $17,570 and $18,184 in 2022, 2021 and 2020, respectively. |
Carrying value of long-lived assets | Carrying value of long-lived assets: The Company reviews long-lived assets to determine if there are events or circumstances indicating that the amount of the asset reflected in the Company’s balance sheet may not be recoverable. When such indicators are present, the Company compares the carrying value of the long-lived asset, or asset group, to the future undiscounted cash flows of the underlying assets to determine if impairment exists. If applicable, an impairment charge would be recorded to write down the carrying value to its fair value. The determination of fair value involves the use of estimates of future cash flows that involve considerable management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance, and economic conditions. No impairment charges of long-lived assets were recorded by the Company during 2022, 2021 or 2020. |
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 provided split dollar life benefits to an executive officer. The Company recorded 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. During 2021, the Company received $2,514 of previously paid premiums on these insurance policies which was recorded as a reduction to this asset and has now fully recovered all the premiums under the terms of the plan. No premiums were paid in 2022, 2021 or 2020. |
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 2022, 2021 or 2020. 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 2022 and 2021, the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance. For the fair value assessment of certain trademarks where the “step-zero” analysis was not considered appropriate, impairment testing was performed in fourth quarter 2022 and 2021 using discounted cash flows and estimated royalty rates. For these trademarks, holding all other assumptions constant at the test date in 2022, 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 13% and 10%, respectively. Individually, a 100 basis point increase in the discount rate or a 100 basis point decrease in the royalty rate would not result in a potential impairment as of December 31, 2022. |
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. The Company periodically reviews assumptions and estimates of the Company’s probable tax obligations and effects on its liability for uncertain tax positions, using informed judgment which may include the use of third-party consultants, advisors and legal counsel, as well as historical experience. Further information regarding 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 $5,000 contribution to the VEBA trust in 2022 but no contributions were made to the trust in 2021 or 2020. The Company will continue using the VEBA trust funds to pay the actual cost of such benefits through most or possibly all of 2023. At December 31, 2022 and 2021, the VEBA trust held $3,879 and $3,941, 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, 2022 and 2021 was 3.1% and 3.1%, 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. |
Recently Adopted Accounting Pronouncements | Recently adopted accounting pronouncements: As of the date of this report, there are no recent accounting pronouncements that have not yet been adopted that Management believes would have a material impact on the Company’s consolidated financial statements. |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED LIABILITIES | |
Schedule of accrued liabilities | December 31, 2022 2021 Compensation $ 12,801 $ 10,865 Other employee benefits 6,893 8,640 Taxes, other than income 4,078 3,574 Advertising and promotions 21,220 22,547 Other 9,452 8,270 $ 54,444 $ 53,896 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of domestic and foreign components of pretax income | 2022 2021 2020 Domestic $ 84,286 $ 77,434 $ 69,211 Foreign 13,855 8,295 7,051 $ 98,141 $ 85,729 $ 76,262 |
Schedule of components of provision of income taxes | 2022 2021 2020 Current: Federal $ 13,070 $ 16,886 $ 14,831 Foreign 4,110 1,983 1,029 State 2,605 2,822 1,763 19,785 21,691 17,623 Deferred: Federal 2,364 (2,069) (1,006) Foreign 81 39 1,316 State 19 760 (645) 2,464 (1,270) (335) $ 22,249 $ 20,421 $ 17,288 |
Schedule of significant components of net deferred tax liability | December 31, 2022 2021 Deferred tax assets: Accrued customer promotions $ 1,269 $ 2,107 Deferred compensation 17,533 22,311 Postretirement benefits 2,466 3,324 Other accrued expenses 7,744 5,158 Foreign subsidiary tax loss carry forward 4,650 4,497 Outside basis difference in foreign subsidiary 359 365 Capitalized research and development costs 2,049 — Deductible state tax depreciation 893 736 Tax credit carry forward 2,047 2,517 39,010 41,015 Valuation allowances (5,703) (5,555) Total deferred tax assets $ 33,307 $ 35,460 Deferred tax liabilities: Depreciation $ 27,153 $ 23,342 Deductible goodwill and trademarks 37,608 38,255 Accrued export company commissions 4,580 4,615 Employee benefit plans 395 525 Inventory reserves 934 2,532 Prepaid insurance 1,016 965 Unrealized capital gains (160) 3,874 Deferred foreign exchange gain 119 132 Deferred gain on sale of real estate 5,213 5,309 Total deferred tax liabilities $ 76,858 $ 79,549 Net deferred tax liability $ 43,551 $ 44,089 |
Schedule of reconciliation of statutory and effective income tax rate | 2022 2021 2020 U.S. statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net 2.3 2.4 2.1 Foreign income tax rates 1.0 0.2 1.0 Income tax credits and adjustments (0.8) (0.6) (1.4) Adjustment of deferred tax balances (0.7) 0.6 (0.2) Reserve for uncertain tax benefits 0.3 — (0.8) Other, net (0.4) 0.2 1.0 Effective income tax rate 22.7 % 23.8 % 22.7 % |
Schedule of reconciliation of beginning and ending balances of total amounts of unrecognized tax benefits | 2022 2021 2020 Unrecognized tax benefits at January 1 $ 3,133 $ 3,011 $ 3,678 Increases in tax positions for the current year 393 700 377 Reductions in tax positions for lapse of statute of limitations (134) (578) (501) Reductions in tax positions for settlements and payments — — (308) Increases (decreases) in prior period unrecognized tax benefits due to change in judgment — — (235) Unrecognized tax benefits at December 31 $ 3,392 $ 3,133 $ 3,011 |
SHARE CAPITAL AND CAPITAL IN _2
SHARE CAPITAL AND CAPITAL IN EXCESS OF PAR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 December 31, 2019 38,836 26,969 26,287 18,254 90 (1,992) 696,059 Issuance of 3% stock dividend 1,157 804 787 547 3 — 42,244 Conversion of Class B common shares to common shares 62 43 (62) (43) — — — Purchase and retirement of common shares (982) (682) — — — — (31,373) Balance at December 31, 2020 39,073 27,134 27,012 18,758 93 (1,992) 706,930 Issuance of 3% stock dividend 1,163 807 810 562 3 — 32,495 Conversion of Class B common shares to common shares 29 20 (29) (20) — — — Purchase and retirement of common shares (921) (639) — — — — (29,545) Balance at December 31, 2021 39,344 27,322 27,793 19,300 96 (1,992) 709,880 Issuance of 3% stock dividend 1,176 817 833 579 3 — 41,068 Conversion of Class B common shares to common shares 19 13 (19) (13) — — — Purchase and retirement of common shares (818) (568) — — — — (31,342) Balance at December 31, 2022 39,721 $ 27,584 28,607 $ 19,866 99 $ (1,992) $ 719,606 |
Schedule of shares purchased and retired | Total Number of Shares Year Purchased (000’s) Average Price Paid Per Share 2022 818 $ 38.98 2021 921 $ 32.76 2020 982 $ 32.59 |
OTHER INCOME, NET (Tables)
OTHER INCOME, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
OTHER INCOME, NET | |
Schedule of other income, net | 2022 2021 2020 Interest and dividend income $ 2,641 $ 2,740 $ 4,005 Gains (losses) on trading securities relating to deferred compensation plans (17,263) 14,207 12,519 Interest expense (104) (46) (164) Foreign exchange gains 1,307 667 534 Capital gains (losses) 121 (286) (6) Miscellaneous, net 684 1,314 1,130 $ (12,614) $ 18,596 $ 18,018 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of amounts recognized in accumulated other comprehensive loss (pre-tax) | Prior service credit $ — Net actuarial gain (4,452) Net amount recognized in accumulated other comprehensive loss $ (4,452) |
Schedule of changes in accumulated postretirement benefit obligation | December 31, 2022 2021 Benefit obligation, beginning of year $ 13,235 $ 13,487 Service cost 241 270 Interest cost 336 291 Actuarial (gain)/loss (3,323) (326) Benefits paid (528) (487) Benefit obligation, end of year $ 9,961 $ 13,235 |
Schedule of net periodic postretirement benefit cost (income) | 2022 2021 2020 Service cost—benefits attributed to service during the period $ 241 $ 270 $ 288 Interest cost on the accumulated postretirement benefit obligation 336 291 403 Net amortization (826) (1,405) (1,349) Net periodic postretirement benefit cost (income) $ (249) $ (844) $ (658) |
SEGMENT AND GEOGRAPHIC INFORM_2
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |
Schedule of geographic data | 2022 2021 2020 Net product sales: United States $ 622,817 $ 514,437 $ 431,024 Canada, Mexico and Other 58,623 51,606 36,403 $ 681,440 $ 566,043 $ 467,427 Long-lived assets: United States $ 182,393 $ 178,936 $ 155,664 Canada 25,715 27,051 28,765 Mexico and Other 3,935 2,919 2,899 $ 212,043 $ 208,906 $ 187,328 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities measured at fair value | Estimated Fair Value December 31, 2022 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 53,270 $ 53,270 $ — $ — Available for sale securities 272,448 1,889 270,559 — Foreign currency derivatives (282) — (282) — Commodity derivatives 10 10 — — Trading securities 71,208 56,049 15,159 — Total assets measured at fair value $ 396,654 $ 111,218 $ 285,436 $ — Estimated Fair Value December 31, 2021 Total Input Levels Used Fair Value Level 1 Level 2 Level 3 Cash and equivalents $ 105,840 $ 105,840 $ — $ — Available for sale securities 241,407 1,282 240,125 — Foreign currency derivatives 426 — 426 — Commodity derivatives 124 124 — — Trading securities 89,736 76,196 13,540 — Total assets measured at fair value $ 437,533 $ 183,442 $ 254,091 $ — |
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, 2022 Amortized Fair Unrealized Available for Sale: Cost Value Gains Losses Municipal bonds $ 41 $ 40 $ — $ (1) Variable rate demand notes 4,800 4,800 — — Corporate bonds 276,148 264,575 — (11,573) Government securities 1,924 1,889 — (35) Certificates of deposit 1,157 1,144 — (13) $ 284,070 $ 272,448 $ — $ (11,622) December 31, 2021 Amortized Fair Unrealized Available for Sale: Cost Value Gains Losses Municipal bonds $ 542 $ 536 $ — $ (6) Variable rate demand notes — — — — Corporate bonds 238,045 236,332 — (1,713) Government securities 1,271 1,282 11 — Certificates of deposit 3,246 3,257 11 — $ 243,104 $ 241,407 $ 22 $ (1,719) |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency derivatives $ 7,264 $ — $ (282) Commodity derivatives 189 10 — Total derivatives $ 10 $ (282) December 31, 2021 Notional Amounts Assets Liabilities Derivatives designated as hedging instruments: Foreign currency derivatives $ 6,729 $ 426 $ — Commodity derivatives 6,012 231 (107) Total derivatives $ 657 $ (107) |
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, 2022 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 derivatives $ (484) $ 223 $ — Commodity derivatives 233 347 — Total $ (251) $ 570 $ — For Year Ended December 31, 2021 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 derivatives $ 93 $ 445 $ — Commodity derivatives 1,330 2,148 — Total $ 1,423 $ 2,593 $ — |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2020 $ (24,581) $ 1,992 $ 589 $ 713 $ 1,472 $ (19,815) Other comprehensive earnings (loss) before reclassifications (301) (3,205) 70 1,009 332 (2,095) Reclassifications from accumulated other comprehensive loss — (73) (337) (1,628) (1,065) (3,103) Other comprehensive earnings (loss) net of tax (301) (3,278) (267) (619) (733) (5,198) Balance at December 31, 2021 $ (24,882) $ (1,286) $ 322 $ 94 $ 739 $ (25,013) Other comprehensive earnings (loss) before reclassifications 1,087 (7,511) (368) 177 2,529 (4,086) Reclassifications from accumulated other comprehensive loss — (12) (169) (263) (626) (1,070) Other comprehensive earnings (loss) net of tax 1,087 (7,523) (537) (86) 1,903 (5,156) Balance at December 31, 2022 $ (23,795) $ (8,809) $ (215) $ 8 $ 2,642 $ (30,169) |
Amount reclassified from accumulated other comprehensive income (loss) | Details about Accumulated Other Year to Date Ended Comprehensive Income Components December 31, 2022 December 31, 2021 Location of (Gain) Loss Recognized in Earnings Investments $ (16) $ (96) Other income, net Foreign currency derivatives (223) (445) Other income, net Commodity derivatives (347) (2,148) Product cost of goods sold Postretirement and pension benefits (826) (1,405) Other income, net Total before tax (1,412) (4,094) Tax expense (benefit) 342 991 Net of tax $ (1,070) $ (3,103) |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in carrying amount of trademarks | 2022 2021 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) |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Recognition | |||
Selling, marketing and administrative expenses | $ 121,976 | $ 132,108 | $ 112,117 |
Royalty income (as a percent) | 0.10% | ||
Rental income (as a percent) | 1% | ||
Cash and cash equivalents: | |||
Cash and cash equivalents | $ 53,270 | 105,840 | |
Inventories: | |||
Inventories at cost, last-in, first-out (LIFO) method | 77,083 | 51,355 | |
Excess of current cost over LIFO cost of inventories | 34,898 | 21,348 | |
Foreign inventories at cost, first-in, first-out (FIFO) method | 7,183 | 4,150 | |
Foreign Banks | |||
Cash and cash equivalents: | |||
Cash and cash equivalents | $ 5,191 | 4,577 | |
Minimum | |||
Investments: | |||
Marketable securities, maturity period | 3 years | ||
Maximum | |||
Investments: | |||
Marketable securities, maturity period | 5 years | ||
Shipping and Handling | |||
Revenue Recognition | |||
Selling, marketing and administrative expenses | $ 67,342 | $ 55,289 | $ 42,593 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Property (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, plant and equipment: | |||
Depreciation expense | $ 17,668 | $ 17,570 | $ 18,184 |
Impairment charges of long-lived assets | $ 0 | $ 0 | $ 0 |
Buildings | Minimum | |||
Property, plant and equipment: | |||
Useful lives | 20 years | ||
Buildings | Maximum | |||
Property, plant and equipment: | |||
Useful lives | 50 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 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Benefits and Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |||
Amount of previously paid premiums received | $ 2,514 | $ 23,527 | |
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, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
VEBA trust | ||||
Contribution by entity to VEBA trust | $ 5,000 | $ 0 | $ 0 | |
Cash and cash equivalents held by VEBA trust | $ 105,840 | $ 53,270 | $ 105,840 | |
Bank loans | ||||
Weighted interest rate (as a percent) | 3.10% | 3.10% | 3.10% | |
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 | 100% | |||
Number of basis points decrease in royalty rate | 100% | |||
Percentage of reduction of fair value due to increase in discount rate | 13% | |||
Percentage of reduction of fair value due to decrease in royalty rate | 10% | |||
VEBA Trust | Level 1 | ||||
VEBA trust | ||||
Cash and cash equivalents held by VEBA trust | $ 3,941 | $ 3,879 | $ 3,941 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - EPS (Details) | 12 Months Ended |
Dec. 31, 2022 item | |
Common Stock | |
Earnings per share: | |
Voting right per share (in votes per share) | 1 |
Class B Common Stock | |
Earnings per share: | |
Voting right per share (in votes per share) | 10 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ACCRUED LIABILITIES | ||
Compensation | $ 12,801 | $ 10,865 |
Other employee benefits | 6,893 | 8,640 |
Taxes, other than income | 4,078 | 3,574 |
Advertising and promotions | 21,220 | 22,547 |
Other | 9,452 | 8,270 |
Total accrued liabilities | $ 54,444 | $ 53,896 |
INDUSTRIAL DEVELOPMENT BONDS (D
INDUSTRIAL DEVELOPMENT BONDS (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INDUSTRIAL DEVELOPMENT BONDS | ||
Industrial development bonds, average floating interest rate (as a percent) | 1.30% | 0.70% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Domestic and foreign components of pretax income | |||
Domestic | $ 84,286 | $ 77,434 | $ 69,211 |
Foreign | 13,855 | 8,295 | 7,051 |
Earnings before income taxes | 98,141 | 85,729 | 76,262 |
Current: | |||
Federal | 13,070 | 16,886 | 14,831 |
Foreign | 4,110 | 1,983 | 1,029 |
State | 2,605 | 2,822 | 1,763 |
Total current | 19,785 | 21,691 | 17,623 |
Deferred: | |||
Federal | 2,364 | (2,069) | (1,006) |
Foreign | 81 | 39 | 1,316 |
State | 19 | 760 | (645) |
Total deferred | 2,464 | (1,270) | (335) |
Total provision for income taxes | 22,249 | 20,421 | $ 17,288 |
Deferred tax assets: | |||
Accrued customer promotions | 1,269 | 2,107 | |
Deferred compensation | 17,533 | 22,311 | |
Postretirement benefits | 2,466 | 3,324 | |
Other accrued expenses | 7,744 | 5,158 | |
Foreign subsidiary tax loss carry forward | 4,650 | 4,497 | |
Outside basis difference in foreign subsidiary | 359 | 365 | |
Capitalized research and development costs | 2,049 | ||
Deductible state tax depreciation | 893 | 736 | |
Tax credit carry forward | 2,047 | 2,517 | |
Deferred tax assets, gross | 39,010 | 41,015 | |
Valuation allowance | (5,703) | (5,555) | |
Total deferred tax assets | 33,307 | 35,460 | |
Deferred tax liabilities: | |||
Depreciation | 27,153 | 23,342 | |
Deductible goodwill and trademarks | 37,608 | 38,255 | |
Accrued export company commissions | 4,580 | 4,615 | |
Employee benefit plans | 395 | 525 | |
Inventory reserves | 934 | 2,532 | |
Prepaid insurance | 1,016 | 965 | |
Unrealized capital gains | (160) | 3,874 | |
Deferred foreign exchange gain | 119 | 132 | |
Deferred gain on sale of real estate | 5,213 | 5,309 | |
Total deferred tax liabilities | 76,858 | 79,549 | |
Net deferred tax liability | 43,551 | 44,089 | |
State tax credit carry-forwards expiring in 2028 | 50 | ||
State tax credit carry-forwards expiring in 2029 | 130 | ||
State tax credit carry-forwards expiring in 2030 | 212 | ||
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 | 235 | ||
State tax credit carry-forwards expiring in 2035 | 274 | ||
State tax credit carry-forwards expiring in 2036 | 235 | ||
State tax credit carry-forwards expiring in 2037 | 237 | ||
Valuation allowance for the expired amounts | $ 1,053 | $ 924 |
INCOME TAXES - Effective tax ra
INCOME TAXES - Effective tax rate - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective income tax rate differs from the statutory rate | |||
U.S. statutory rate (as a percent) | 21% | 21% | 21% |
State income taxes, net (as a percent) | 2.30% | 2.40% | 2.10% |
Foreign income tax rates (as a percent) | 1% | 0.20% | 1% |
Income tax credits and adjustments (as a percent) | (0.80%) | (0.60%) | (1.40%) |
Adjustment of deferred tax balances (as a percent) | (0.70%) | 0.60% | (0.20%) |
Reserve for uncertain tax benefits (as a percent) | 0.30% | (0.80%) | |
Other, net (as a percent) | (0.40%) | 0.20% | 1% |
Effective income tax rate (as a percent) | 22.70% | 23.80% | 22.70% |
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2026 | $ 270 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2027 | 57 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2028 | 171 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2029 | 98 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2030 | 296 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2031 | 394 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2032 | 297 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2033 | 120 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2034 | 415 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2035 | 524 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2036 | 761 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2037 | 388 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2038 | 186 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2039 | 151 | ||
Tax benefits of foreign subsidiary tax loss carry forwards expiring in 2040 | 369 | ||
Unrecognized tax benefits | 3,392 | $ 3,133 | $ 3,011 |
Portion of unrecognized tax benefits that, if recognized, would favorably affect annual effective income tax rate | 1,734 | 1,547 | |
Interest and penalties included in liability for uncertain tax positions | 355 | 282 | |
Reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits | |||
Unrecognized tax benefits at the beginning of the period | 3,133 | 3,011 | 3,678 |
Increases in tax positions for the current year | 393 | 700 | 377 |
Reductions in tax positions for lapse of statute of limitations | (134) | (578) | (501) |
Reductions in tax positions for settlements and payments | (308) | ||
Increases (decreases) in prior period unrecognized tax benefits due to change in judgment | (235) | ||
Unrecognized tax benefits at the end of the period | $ 3,392 | $ 3,133 | $ 3,011 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in share capital and capital in excess of par value | |||
Balance at the beginning of the period | $ 768,797 | ||
Balance at the beginning of the period (in shares) | 96 | ||
Balance at the end of the period | $ 782,882 | $ 768,797 | |
Balance at the end of the period (in shares) | 99 | 96 | |
Total Number of Shares Purchased | 818 | 921 | 982 |
Average Price Paid Per Share (in dollars per share) | $ 38.98 | $ 32.76 | $ 32.59 |
Stock dividends (as a percent) | 3% | 3% | 3% |
Common Stock. | |||
Changes in share capital and capital in excess of par value | |||
Balance at the beginning of the period | $ 27,322 | $ 27,134 | $ 26,969 |
Balance at the beginning of the period (in shares) | 39,344 | 39,073 | 38,836 |
Issuance of 3% stock dividend | $ 817 | $ 807 | $ 804 |
Issuance of 3% stock dividend (in shares) | 1,176 | 1,163 | 1,157 |
Conversion of Class B common shares to common shares | $ 13 | $ 20 | $ 43 |
Conversion of Class B common shares to common shares (in shares) | 19 | 29 | 62 |
Purchase and retirement of common shares | $ (568) | $ (639) | $ (682) |
Purchase and retirement of common shares (in shares) | (818) | (921) | (982) |
Balance at the end of the period | $ 27,584 | $ 27,322 | $ 27,134 |
Balance at the end of the period (in shares) | 39,721 | 39,344 | 39,073 |
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) |
Balance at the beginning of the period (in shares) | 96 | 93 | 90 |
Issuance of 3% stock dividend (in shares) | 3 | 3 | 3 |
Balance at the end of the period | $ (1,992) | $ (1,992) | $ (1,992) |
Balance at the end of the period (in shares) | 99 | 96 | 93 |
Capital in Excess of Par Value | |||
Changes in share capital and capital in excess of par value | |||
Balance at the beginning of the period | $ 709,880 | $ 706,930 | $ 696,059 |
Issuance of 3% stock dividend | 41,068 | 32,495 | 42,244 |
Purchase and retirement of common shares | (31,342) | (29,545) | (31,373) |
Balance at the end of the period | 719,606 | 709,880 | 706,930 |
Class B Common Stock | Common Stock. | |||
Changes in share capital and capital in excess of par value | |||
Balance at the beginning of the period | $ 19,300 | $ 18,758 | $ 18,254 |
Balance at the beginning of the period (in shares) | 27,793 | 27,012 | 26,287 |
Issuance of 3% stock dividend | $ 579 | $ 562 | $ 547 |
Issuance of 3% stock dividend (in shares) | 833 | 810 | 787 |
Conversion of Class B common shares to common shares | $ (13) | $ (20) | $ (43) |
Conversion of Class B common shares to common shares (in shares) | (19) | (29) | (62) |
Balance at the end of the period | $ 19,866 | $ 19,300 | $ 18,758 |
Balance at the end of the period (in shares) | 28,607 | 27,793 | 27,012 |
OTHER INCOME, NET (Details)
OTHER INCOME, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OTHER INCOME, NET | |||
Interest and dividend income | $ 2,641 | $ 2,740 | $ 4,005 |
Gains (losses) on trading securities relating to deferred compensation plans | (17,263) | 14,207 | 12,519 |
Interest expense | (104) | (46) | (164) |
Foreign exchange gains | 1,307 | 667 | 534 |
Capital gains (losses) | 121 | (286) | (6) |
Miscellaneous, net | 684 | 1,314 | 1,130 |
Total other income, net | $ (12,614) | $ 18,596 | $ 18,018 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - Multi-employer defined benefit pension plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Credited service period | 1 year | ||
Pension expense | $ 2,682 | $ 3,010 | $ 2,772 |
Employer contributions to profit sharing and retirement savings-investment plan | $ 3,265 | $ 3,201 | $ 2,766 |
EMPLOYEE BENEFIT PLANS - Multi-
EMPLOYEE BENEFIT PLANS - Multi-employer (Details) - Multi-employer defined benefit pension plan - USD ($) $ in Thousands | 12 Months Ended | ||||
Jun. 12, 2012 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Pension Plans | |||||
Pension expense | $ 2,682 | $ 3,010 | $ 2,772 | ||
Consenting agreement entered with local bargaining union | |||||
Pension Plans | |||||
Percentage of funded status | 48.50% | ||||
Employer contributions to multi-employer defined benefit pension plans | $ 3,508 | $ 3,118 | 2,850 | ||
Insolvent period | 20 years | ||||
Estimated liability upon withdrawal from plan | 104,300 | 99,300 | $ 99,800 | ||
Percentage of annual compounded surcharge for rehabilitation | 5% | ||||
Percentage of interim surcharge | 5% | ||||
Pension expense | $ 3,510 | 3,156 | 2,866 | ||
Surcharges | $ 1,237 | $ 1,112 | $ 1,010 |
EMPLOYEE BENEFIT PLANS - Deferr
EMPLOYEE BENEFIT PLANS - Deferred compensation (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Deferred compensation | ||
Number of deferred compensation plans | item | 3 | |
Trading securities | $ | $ 71,208 | $ 89,736 |
EMPLOYEE BENEFIT PLANS - Postre
EMPLOYEE BENEFIT PLANS - Postretirement (Details) - Postretirement benefit plans - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Postretirement benefit plan disclosure | |||
Assumed ultimate health care cost trend rate (as a percent) | 3% | ||
Accumulated benefit obligation after plan amendment | $ 9,961 | $ 13,235 | |
Amounts recognized in accumulated other comprehensive loss (pre-tax) | |||
Net actuarial gain | (4,452) | ||
Net amount recognized in accumulated other comprehensive loss | (4,452) | ||
Changes in the accumulated postretirement benefit obligation | |||
Benefit obligation, beginning of the period | 13,235 | 13,487 | |
Service cost | 241 | 270 | $ 288 |
Interest cost | 336 | 291 | 403 |
Actuarial (gain)/loss | (3,323) | (326) | |
Benefits paid | (528) | (487) | |
Benefit obligation, end of the period | 9,961 | 13,235 | 13,487 |
Net periodic postretirement benefit cost | |||
Service cost-benefits attributed to service during the period | 241 | 270 | 288 |
Interest cost on the accumulated postretirement benefit obligation | 336 | 291 | 403 |
Net amortization | (826) | (1,405) | (1,349) |
Net periodic postretirement benefit cost (income) | $ (249) | $ (844) | $ (658) |
EMPLOYEE BENEFIT PLANS - Expect
EMPLOYEE BENEFIT PLANS - Expected future benefit payments (Details) - Postretirement benefit plans $ in Thousands | Dec. 31, 2022 USD ($) |
Estimated future benefit payments | |
2023 | $ 658 |
2024 | 663 |
2025 | 677 |
2026 | 688 |
2027 | 696 |
2028 through 2032 | $ 3,543 |
SEGMENT AND GEOGRAPHIC INFORM_3
SEGMENT AND GEOGRAPHIC INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SEGMENT AND GEOGRAPHIC INFORMATION | |||
Revenue | $ 686,970 | $ 570,776 | $ 471,063 |
Long-lived assets: | 212,043 | 208,906 | 187,328 |
United States | |||
SEGMENT AND GEOGRAPHIC INFORMATION | |||
Long-lived assets: | 182,393 | 178,936 | 155,664 |
Canada | |||
SEGMENT AND GEOGRAPHIC INFORMATION | |||
Long-lived assets: | 25,715 | 27,051 | 28,765 |
Mexico and Other | |||
SEGMENT AND GEOGRAPHIC INFORMATION | |||
Long-lived assets: | 3,935 | 2,919 | 2,899 |
Product | |||
SEGMENT AND GEOGRAPHIC INFORMATION | |||
Revenue | 681,440 | 566,043 | 467,427 |
Product | United States | |||
SEGMENT AND GEOGRAPHIC INFORMATION | |||
Revenue | 622,817 | 514,437 | 431,024 |
Product | Canada, Mexico, and Other | |||
SEGMENT AND GEOGRAPHIC INFORMATION | |||
Revenue | $ 58,623 | $ 51,606 | $ 36,403 |
SEGMENT AND GEOGRAPHIC INFORM_4
SEGMENT AND GEOGRAPHIC INFORMATION - Concentration (Details) - item | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Wal-Mart | Sales Revenue | A major customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 23% | 22.70% | 23.50% |
Dollar Tree | Sales Revenue | A major customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 12.40% | 12.10% | 11.70% |
McLane | Sales Revenue | A major customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 20.40% | 21% | 22.10% |
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 | 37% | 36% |
FAIR VALUE MEASUREMENTS - Bonds
FAIR VALUE MEASUREMENTS - Bonds (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
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 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair value measurements | ||
Cash and cash equivalents | $ 53,270 | $ 105,840 |
Available for sale securities | 272,448 | 241,407 |
Trading securities | 71,208 | 89,736 |
Fair value measured on a recurring basis | ||
Fair value measurements | ||
Cash and cash equivalents | 53,270 | 105,840 |
Available for sale securities | 272,448 | 241,407 |
Trading securities | 71,208 | 89,736 |
Total assets measured at fair value | 396,654 | 437,533 |
Fair value measured on a recurring basis | Foreign currency derivatives. | ||
Fair value measurements | ||
Derivative instruments, net | (282) | 426 |
Fair value measured on a recurring basis | Commodity derivatives | ||
Fair value measurements | ||
Derivative instruments, net | 10 | 124 |
Fair value measured on a recurring basis | Level 1 | ||
Fair value measurements | ||
Cash and cash equivalents | 53,270 | 105,840 |
Available for sale securities | 1,889 | 1,282 |
Trading securities | 56,049 | 76,196 |
Total assets measured at fair value | 111,218 | 183,442 |
Fair value measured on a recurring basis | Level 1 | Commodity derivatives | ||
Fair value measurements | ||
Derivative instruments, net | 10 | 124 |
Fair value measured on a recurring basis | Level 2 | ||
Fair value measurements | ||
Available for sale securities | 270,559 | 240,125 |
Trading securities | 15,159 | 13,540 |
Total assets measured at fair value | 285,436 | 254,091 |
Fair value measured on a recurring basis | Level 2 | Foreign currency derivatives. | ||
Fair value measurements | ||
Derivative instruments, net | $ (282) | $ 426 |
FAIR VALUE MEASUREMENTS AFS (De
FAIR VALUE MEASUREMENTS AFS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Available for Sale: | ||
Amortized Cost | $ 284,070 | $ 243,104 |
Fair Value | 272,448 | 241,407 |
Unrealized Gains | 22 | |
Unrealized Losses | (11,622) | (1,719) |
Municipal bonds | ||
Available for Sale: | ||
Amortized Cost | 41 | 542 |
Fair Value | 40 | 536 |
Unrealized Losses | (1) | (6) |
Variable rate demand notes | ||
Available for Sale: | ||
Amortized Cost | 4,800 | |
Fair Value | 4,800 | |
Corporate bonds | ||
Available for Sale: | ||
Amortized Cost | 276,148 | 238,045 |
Fair Value | 264,575 | 236,332 |
Unrealized Losses | (11,573) | (1,713) |
Government securities | ||
Available for Sale: | ||
Amortized Cost | 1,924 | 1,271 |
Fair Value | 1,889 | 1,282 |
Unrealized Gains | 11 | |
Unrealized Losses | (35) | |
Certificates of deposit | ||
Available for Sale: | ||
Amortized Cost | 1,157 | 3,246 |
Fair Value | 1,144 | 3,257 |
Unrealized Gains | $ 11 | |
Unrealized Losses | $ (13) |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative contracts | |||
Assets | $ 10 | $ 657 | |
Liabilities | (282) | (107) | |
Derivatives designated as hedging instruments: | Foreign currency derivatives. | |||
Derivative contracts | |||
Notional Amounts | 7,264 | 6,729 | |
Assets | 426 | ||
Liabilities | (282) | ||
Derivatives designated as hedging instruments: | Commodity derivatives | |||
Derivative contracts | |||
Notional Amounts | 189 | 6,012 | |
Assets | $ 10 | 231 | |
Liabilities | $ (107) | ||
Forecast | |||
Derivative contracts | |||
Accumulated comprehensive gain to be reclassified | $ 10 | ||
Forecast | Foreign currency derivatives. | |||
Derivative contracts | |||
Accumulated other comprehensive loss to be reclassified | $ (282) |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - OCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effect of derivative instruments on earnings | |||
Gain (Loss) Recognized in OCI | $ (251) | $ 1,423 | $ 1,259 |
Reclassified from Accumulated OCI into Earnings | |||
Effect of derivative instruments on earnings | |||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | 570 | 2,593 | |
Foreign currency derivatives. | |||
Effect of derivative instruments on earnings | |||
Gain (Loss) Recognized in OCI | (484) | 93 | |
Foreign currency derivatives. | Reclassified from Accumulated OCI into Earnings | |||
Effect of derivative instruments on earnings | |||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | 223 | 445 | |
Commodity derivatives | |||
Effect of derivative instruments on earnings | |||
Gain (Loss) Recognized in OCI | 233 | 1,330 | |
Commodity derivatives | Reclassified from Accumulated OCI into Earnings | |||
Effect of derivative instruments on earnings | |||
Gain (Loss) Reclassified from Accumulated OCI into Earnings | $ 347 | $ 2,148 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | $ 769,042 | |
Balance at the end of the period | 783,171 | $ 769,042 |
Foreign Currency Translation Adjustment | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (24,882) | (24,581) |
Other comprehensive earnings (loss) before reclassifications | 1,087 | (301) |
Other comprehensive earnings (loss) net of tax | 1,087 | (301) |
Balance at the end of the period | (23,795) | (24,882) |
Investments | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (1,286) | 1,992 |
Other comprehensive earnings (loss) before reclassifications | (7,511) | (3,205) |
Reclassifications from accumulated other comprehensive loss | (12) | (73) |
Other comprehensive earnings (loss) net of tax | (7,523) | (3,278) |
Balance at the end of the period | (8,809) | (1,286) |
Foreign Currency Derivatives | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | 322 | 589 |
Other comprehensive earnings (loss) before reclassifications | (368) | 70 |
Reclassifications from accumulated other comprehensive loss | (169) | (337) |
Other comprehensive earnings (loss) net of tax | (537) | (267) |
Balance at the end of the period | (215) | 322 |
Commodity Derivatives | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | 94 | 713 |
Other comprehensive earnings (loss) before reclassifications | 177 | 1,009 |
Reclassifications from accumulated other comprehensive loss | (263) | (1,628) |
Other comprehensive earnings (loss) net of tax | (86) | (619) |
Balance at the end of the period | 8 | 94 |
Postretirement and Pension Benefits | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | 739 | 1,472 |
Other comprehensive earnings (loss) before reclassifications | 2,529 | 332 |
Reclassifications from accumulated other comprehensive loss | (626) | (1,065) |
Other comprehensive earnings (loss) net of tax | 1,903 | (733) |
Balance at the end of the period | 2,642 | 739 |
Accumulated Other Comprehensive Earnings (Loss). | ||
Accumulated other comprehensive earnings (loss), net of tax | ||
Balance at the beginning of the period | (25,013) | (19,815) |
Other comprehensive earnings (loss) before reclassifications | (4,086) | (2,095) |
Reclassifications from accumulated other comprehensive loss | (1,070) | (3,103) |
Other comprehensive earnings (loss) net of tax | (5,156) | (5,198) |
Balance at the end of the period | $ (30,169) | $ (25,013) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassification from AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | $ 12,614 | $ (18,596) | $ (18,018) |
Cost of goods sold | 454,239 | 371,535 | 300,702 |
Total before tax | (98,141) | (85,729) | (76,262) |
Tax (expense) benefit | 22,249 | 20,421 | 17,288 |
Net of tax | (75,892) | (65,308) | $ (58,974) |
Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Total before tax | (1,412) | (4,094) | |
Tax (expense) benefit | 342 | 991 | |
Net of tax | (1,070) | (3,103) | |
Investments | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | (16) | (96) | |
Foreign Currency Derivatives | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | (223) | (445) | |
Commodity Derivatives | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Cost of goods sold | $ (347) | $ (2,148) | |
Type of Cost, Good or Service [Extensible List] | Product | Product | |
Postretirement and Pension Benefits | Reclassified from Accumulated OCI into Earnings | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income, net | $ (826) | $ (1,405) |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
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) | (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, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease cost | $ 979 | $ 1,068 | |
Operating lease right-of-use assets | 4,703 | 7,419 | |
Operating lease liabilities | $ 4,743 | $ 7,419 | |
Weighted average remaining lease term | 15 years 10 months 24 days | 16 years 10 months 24 days | |
Weighted average discount rate | 3.30% | 2.30% | |
2023 | $ 654 | ||
2024 | 154 | ||
2025 | 159 | ||
2026 | 153 | ||
2027 through 2041 | $ 3,623 | ||
Lessor, Operating Lease, Existence of Option to Extend [true false] | true | ||
Property, Plant and Equipment, Gross | $ 641,182 | $ 621,402 | |
Lease income | $ 4,934 | 4,223 | |
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 19 years | ||
Commercial real estate leased to third parties | |||
Lessee, Lease, Description [Line Items] | |||
Property, Plant and Equipment, Gross | $ 51,370 | 51,384 | |
Depreciation | $ 16,903 | $ 15,844 | |
Commercial real estate leased to third parties | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lessor, renewal term | 58 years |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Description | |||
Balance at beginning of year | $ 7,836 | $ 7,287 | $ 6,934 |
Additions charged to expense | 12,335 | 10,533 | 9,235 |
Deductions | 12,133 | 9,984 | 8,882 |
Balance at End of Year | 8,038 | 7,836 | 7,287 |
Reserve for bad debts | |||
Description | |||
Balance at beginning of year | 1,392 | 1,108 | 1,337 |
Additions charged to expense | 34 | 418 | 123 |
Deductions | 12 | 134 | 352 |
Balance at End of Year | 1,414 | 1,392 | 1,108 |
Reserve for cash discounts | |||
Description | |||
Balance at beginning of year | 889 | 586 | 612 |
Additions charged to expense | 12,153 | 10,153 | 8,504 |
Deductions | 12,121 | 9,850 | 8,530 |
Balance at End of Year | 921 | 889 | 586 |
Deferred tax asset valuation | |||
Description | |||
Balance at beginning of year | 5,555 | 5,593 | 4,985 |
Additions charged to expense | 148 | (38) | 608 |
Balance at End of Year | $ 5,703 | $ 5,555 | $ 5,593 |