UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 27, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ----to----
COMMISSION FILE NUMBER 1-1361
Tootsie Roll Industries, Inc.
(Exact Name of Registrant as Specified in its Charter)
VIRGINIA 22-1318955
(State of Incorporation) (I.R.S. Employer Identification No.)
7401 South Cicero Avenue, Chicago, Illinois 60629
(Address of Principal Executive Offices) (Zip Code)
773-838-3400
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No ___
Indicate by check mark whether the Registrant is an accelerated filer (as
Defined in Rule 12b-2 of the Exchange Act)
Yes X No ___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date (June
28, 2003)
Class Outstanding (In Thousands)
Common Stock, $.69 4/9 par value 34,421
Class B Common Stock, $.69 4/9 par value 17,153
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
SEPTEMBER 27, 2003
INDEX
Page No.
Part I - Financial Information
Item 1. Financial Statements: (unaudited)
Consolidated Statements of Financial Position 2
Consolidated Statements of Earnings, Comprehensive
Earnings and Retained Earnings 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-6B
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 6C
Item 4. Controls and Procedures 6C
Part II - Other Information
Item 2. Changes in Securities and Use of Proceeds 7
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 7
Exhibits 31.1 and 31.2 7A-B
Exhibit 32 7C
ITEM 1. FINANCIAL INFORMATION
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of dollars) (UNAUDITED)
ASSETS Sept 27, Sept 28, Dec. 31,
CURRENT ASSETS 2003 2002 2002___
Cash & cash equivalents $ 46,845 $ 62,801 $105,507
Investments 92,465 53,582 40,737
Trade accounts receivable,
Less allowances of 3,258, $3,094 &
$2,005, respectively 83,137 80,717 22,686
Other receivables 2,849 3,528 4,073
Inventories, at cost
Finished goods & work in process 30,194 30,091 26,591
Raw material & supplies 16,522 17,589 17,054
Prepaid expenses 5,446 5,336 3,819
Deferred income taxes 4,481 1,772 4,481
Total current assets 281,939 255,416 224,948
PROPERTY, PLANT & EQUIPMENT,
(at cost)
Land 8,277 8,308 8,297
Buildings 44,001 43,556 43,948
Machinery & equipment 205,159 195,768 196,706
257,437 247,632 248,951
Less-accumulated depreciation 128,264 117,813 120,082
Net property, plant and equipment 129,173 129,819 128,869
OTHER ASSETS
Goodwill 38,151 38,151 38,151
Trademarks 79,348 79,348 79,348
Investments 104,591 103,608 116,501
Split dollar officer life insurance and
Other assets 57,774 58,265 58,263
279,864 279,372 292,263
Total assets $690,976 $664,607 $646,080
-2-
(The accompanying notes are an integral part of these statements)
(in thousands except per share data) (UNAUDITED)
LIABILITIES AND SHAREHOLDERS' EQUITY Sept 27, Sept 28, Dec. 31,
CURRENT LIABILITIES 2003 2002 2002____
Accounts payable $ 16,037 $ 13,096 $ 12,505
Dividends payable 3,613 3,612 3,579
Accrued liabilities 46,160 41,371 35,825
Income taxes payable 27,717 21,194 11,187
Total current liabilities 93,527 79,273 63,096
NON-CURRENT LIABILITIES
Industrial development bonds 7,500 7,500 7,500
Postretirement health care and life
Insurance benefits 8,690 7,966 8,151
Deferred compensation and other liabilities 24,284 19,927 20,939
Deferred income taxes 19,633 16,665 19,654
Total non-current liabilites 60,107 52,058 56,244
Total liabilities 153,634 131,331 119,340
SHAREHOLDERS' EQUITY
Common stock, $.69-4/9 par value-
120,000, shares authorized 34,421, 34,821 & 34,248
respectively, issued 23,903 24,182 23,783
Class B common stock, $.69-4/9 par value-
40,000, shares authorized 17,153, 16,765 & 16,759,
respectively, issued 11,912 11,642 11,638
Capital in excess of par value 369,446 373,157 355,658
Retained earnings 145,527 137,596 148,705
Accumulated other comprehensive earnings (loss) (11,454) (11,309) (11,052)
Treasury stock (at cost)-
56, 56 & 56, shares respectively (1,992) (1,992) (1,992)
Total shareholders' equity 537,342 533,276 526,740
Total liabilities and
Shareholders' equity $690,976 $664,607 $646,080
-2A-
The accompanying notes are an integral part of these statements.
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS (NOTE 1)
(in thousands except per share amounts) (UNAUDITED)
13 Weeks Ended
Sept 27, 2003 & Sept 28,2002
Net sales $147,201 $146,298
Cost of goods sold 84,818 84,338
Gross margin 62,383 61,960
Selling, marketing and administrative expense 22,568 22,599
Earnings from operations 39,815 39,361
Other income, net 886 845
Earnings before income taxes 40,701 40,206
Provision for income taxes 13,756 13,590
Net earnings 26,945 26,616
Other comprehensive income, before tax:
Foreign currency translation adjustments (545) (377)
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period $ 150 $(423)
Less: amounts realized in earnings (37) 113 6 (417)
Unrealized losses on derivatives:
Unrealized holding losses arising during period (341) (192)
Less: amounts realized in earnings (156) (497) 405 213
Other comprehensive loss, before tax (929) (581)
Income tax benefit related to items of other
comprehensive income 142 76
Other comprehensive loss, net of tax (787) (505)
Comprehensive earnings $ 26,158 $ 26,111
Retained earnings at beginning of period $122,191 $114,588
Net earnings 26,945 26,616
Cash dividends (3,609) (3,608)
Retained earnings at end of period $145,527 $137,596
Net earnings per share (note 2) $.52 $.50
Dividends per share * $.07 $.07
Average number of shares outstanding 51,662 53,074
*Does not include 3% stock dividend to shareholders of record on 3/04/03 and 3/05/02.
-3-
(These accompanying notes are an integral part of the statements)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS (NOTE 1)
(in thousands except per share amounts) (UNAUDITED)
39 Weeks Ended
Sept 27, 2003 & Sept 28,2002
Net sales $300,496 $302,420
Cost of goods sold 168,943 168,874
Gross margin 131,553 133,546
Selling, marketing and administrative expense 58,463 58,144
Earnings from operations 73,090 75,402
Other income, net 2,697 3,106
Earnings before income taxes 75,787 78,508
Provision for income taxes 25,616 26,804
Net earnings 50,171 51,704
Other comprehensive income, before tax:
Foreign currency translation adjustments (366) (1,186)
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period $ 388 $(811)
Less: amounts realized in earnings -0- 388 56 (755)
Unrealized gains on derivatives:
Unrealized holding losses arising during period (726) (596)
Less: amounts realized in earnings 281 (445) 1,018 422
Other comprehensive loss, before tax (423) (1,519)
Income tax benefit related to items of other
comprehensive income 21 123
Other comprehensive loss, net of tax (402) (1,396)
Comprehensive earnings $ 49,769 $ 50,308
Retained earnings at beginning of period $148,705 $161,345
Net earnings 50,171 51,704
Cash dividends (10,778) (10,729)
Stock dividends - 3% (42,571) (64,724)
Retained earnings at end of period $145,527 $137,596
Net earnings per share (note 2) $.97 $ .97
Dividends per share * $.21 $.21
Average number of shares outstanding 51,939 53,166
*Does not include 3% stock dividend to shareholders of record on 3/04/03 and 3/05/02.
-3A-
(These accompanying notes are an integral part of the statements)
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
39 WEEKS ENDED
Sept 27, 2003 & Sept 28, 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 50,171 $ 51,704
Adjustments to reconcile net earnings to
Net cash provided by operating
activities:
Depreciation and amortization 8,753 8,893
Amortization/accretion of marketable securities 1,886 949
Purchase of trading securities (2,591) (2,185)
(Increase) decrease in assets:
Accounts receivable (60,540) (60,577)
Other receivables 943 220
Inventories (3,181) (6,837)
Prepaid expenses and other assets (1,153) (8,007)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 13,946 11,084
Income taxes payable and deferred 16,510 10,402
Postretirement health care and life
insurance benefits 540 516
Deferred compensation and other liabilities 1,933 1,932
Other (16) (38)
Net cash provided by operating activities 27,201 8,056
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (9,272) (6,788)
Purchase of held to maturity securities (47,091) (49,893)
Maturity of held to maturity securities 19,401 29,858
Purchase of available for sale securities (41,359) (26,248)
Sale and maturity of available for
sales securities 31,593 26,701
Net cash used in investing activities (46,728) (26,370)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares repurchased and retired (28,332) (14,412)
Dividends paid in cash (10,803) (11,005)
Net cash used in financing activities (39,135) (25,417)
Decrease in cash and cash equivalents (58 662) (43,731)
Cash and cash equivalents-beginning of year 105,507 106,532
Cash and cash equivalents end of quarter $ 46,845 $ 62,801
Supplemental cash flow information:
Income taxes paid $ 11,231 $ 16,497
Interest paid $ 140 $ 236
(These accompanying notes are an integral part of the statements)
-4-
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPT 27, 2003
(in thousands except per share amounts) (UNAUDITED)
Note 1 - Foregoing data has been prepared from the unaudited
financial records of the Company and in the opinion
of management all adjustments necessary for a fair
statement of the results for the interim period have
been reflected. All adjustments were of a normal
and recurring nature. Certain reclassifications have
been made to the prior year financial statements to
conform to the current year presentation. These
consolidated financial statements should be read in
conjunction with the consolidated financial statements
and the related notes included in the Company's 2002
Annual Report on Form 10-K.
Note 2 - Average shares outstanding for the period ended September
27, 2003 reflects stock repurchases of 952 shares for
$28,332 and a 3% stock dividend distributed on April
16, 2003. Average shares outstanding for the period
ended September 28, 2002 reflects stock repurchases of
370 for $14,412 and a 3% stock dividend distributed on
April 17, 2002.
Note 3 - Results of operations for the period ended September 27,
2003 are not necessarily indicative of results to be
expected for the year to end December 31, 2003 because
of the seasonal nature of the Company's operations.
Historically, the Third Quarter has been the Company's
largest sales quarter due to Halloween sales.
Note 4 - New Accounting and Reporting Pronouncements:
In June 2002, the FASB issued Statement of Financial
Accounting Standards No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" (SFAS No.
146). The provisions of SFAS No. 146 are effective for
exit or disposal activities that are initiated after
December 31, 2002. In November 2002, the FASB issued
Interpretation No. 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." This
Interpretation elaborates on the disclosures to be made
by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees
that it has issued. In April 2003, the FASB issued
Statement No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities" (SFAS
No. 149). SFAS No. 149 amends and clarifies financial
accounting and reporting related to derivative instruments,
including certain derivative instruments embedded in other
contracts. In November 2002, the EITF published Issue No.
-5-
00-21, "Revenue Arrangements with Multiple Deliverables"
("EITF 00-21"), which addresses certain aspects of the
accounting by a vendor for arrangements under which it will
perform multiple revenue-generating activities. In January
2003, the FASB issued FASB Interpretation No. 46, Consoli-
dation of Variable Interest Entities, an interpretation of
ARB 51" ("FIN 46"). FIN 46 requires that the assets,
liabilities and results of the activity of variable interest
entities be consolidated into the financial statements of the
company that has the controlling financial interest. The
Company believes that the above-discussed pronouncements are
generally not applicable to the Company's operations and to
the extent that they may be applicable they are not expected
to have a significant impact on the Company's consolidated
financial statements.
-5A-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(dollars in thousands except per share amounts)
The following is Management's discussion of the company's operating results
and analysis of factors which have affected the accompanying Statement of
Earnings.
NET SALES:
Third Quarter, 2003
Third Quarter vs.
2003 2002 Third Quarter, 2002
$147,201 $146,298 +0.6%
Nine Months, 2003
Nine Months vs.
2003 2002 Nine Months, 2002
$300,496 $302,420 -0.6%
Third quarter net sales were $147,201 compared to $146,298 in the third
quarter 2002, an increase of $903 or 0.6%. Nine Month sales were $300,496
compared to $302,420 in the prior year corresponding period, a decrease of
$1,924 or 0.6%. Third Quarter 2003 net sales benefited from successful
marketing and promotional programs, including pre-Halloween sales programs.
However, net sales for nine months 2003 did not overcome the first half
sales decline which was adversely affected by the sluggish economy, a
difficult retail environment, and lower sales in Mexico and Canada.
Selective price increases aided sales results in the third quarter and nine
month 2003 periods; however, increased trade promotions and sales discounts,
which are reported as a reduction in net sales, mitigated some of the
benefit of the sales price increases.
COST OF SALES:
Cost of Sales as a
Third Quarter Percentage of Net Sales
2003 2002 3rd Qtr. 2003 3rd Qtr. 2002
$84,818 $84,338 57.6% 57.6%
Cost of Sales as a
Nine Months Percentage of Net Sales
2003 2002 Nine Months 2003 Nine Months 2002
$168,943 $168,874 56.2% 55.8%
-6-
Cost of sales as a percentage of net sales was 57.6% for both
third quarter 2003 and third quarter 2002. This reflects the
benefits of selective sales price increases and product weight
declines (indirect price increase) which were substantially
offset by higher ingredient costs. Nine month cost of sales as
a percentage of net sales increased from 55.8% in 2002 to 56.2%
in 2003. The increase in nine month 2003 cost of sales as a
percentage of sales for the comparative prior year nine month
period reflects the effects of higher ingredient costs which
were mitigated by sales price increases as discussed above;
lower net sales against generally fixed plant overhead
costs for the comparative nine month periods also adversely
affected cost of sales.
The Company has experienced higher ingredient costs for almost
all of its principal ingredients, including sugar, corn syrup,
vegetable oil, cocoa and chocolate. Although selling price
increases were initiated for some of the Company's products in
early 2003, additional selling price increases and product
weight declines (indirect selling price increases) on certain
items were phased-in throughout the nine month 2003 period in
order to further recoup these higher costs.
NET EARNINGS:
Third Quarter, 2003
Third Quarter vs.
2003 2002 Third Quarter, 2002
$26,945 $26,616 +1.2 %
Nine Months, 2003
Nine Months vs.
2003 2002 Nine Months, 2002
$50,171 $51,704 -3.0%
Third quarter earnings from operations were $39,815 and $39,361
in 2003 and 2002, respectively, an increase of $454 or 1.2%.
Improved third quarter 2003 earnings from operations are the
result of higher reported net sales and ongoing cost control
programs. Although selective sales price increases contributed
to the third quarter sales increase, increased trade promotions
and sales discounts, which are reported as a reduction in net
sales, mitigated some of the benefits of such sales price
increases. Nine months earnings from operations were $73,090
and $75,402 in 2003 and 2002, respectively, a decrease of $2,312
or 3.1%. The decrease in nine months 2003 operating earnings is
attributed to lower reported net sales and higher ingredient
costs as discussed above, as well as higher advertising expense.
In addition, nine months 2003 results reflect a $500 pre-tax
provision relating to a customer bankruptcy in first half 2003.
-6A-
Third quarter 2003 net earnings were $26,945 compared to third
quarter 2002 net earnings of $26,616. Third quarter 2003
earnings per share were $0.52, compared to $.50 per share in
third quarter 2002, an increase of $.02 or 4.0%. Nine months
2003 net earnings were $50,171 compared to nine months 2002 net
earnings of $51,704. Nine months 2003 earnings per share were
$.97, unchanged from $.97 for the comparative 2002 period. Net
earnings per share in third quarter and nine months 2003
benefited from share repurchases which resulted in a slight
reduction in average shares outstanding. Lower investment
income, reflecting lower interest rates, adversely affected
third quarter and nine months 2003 net earnings as compared to
the corresponding 2002 periods.
The consolidated effective income tax rate was 33.8% in both the
third quarter 2003 and 2002. The effective income tax rate
favorably decreased from 34.1% in the nine month 2002 period to
33.8% in the nine month 2003 period. This improvement generally
reflects a reduction in state income taxes.
LIQUIDITY AND CAPITAL RESOURCES:
The Company's current ratio (current assets divided by current
liabilities) is 3.0 to 1 as of the end of third quarter 2003 as
compared to 3.2 to 1 as of third quarter 2002 and 3.6 to 1 as of
fourth quarter 2002. Net working capital was $188,412 as of the
end of third quarter 2003 as compared to $176,143 and $161,852
as of the end of third quarter 2002 and fourth quarter 2002,
respectively. The increase in working capital at the end of
third quarter 2003 compared to third quarter 2002 principally
reflects the reinvestment of earnings and cash flows during the
twelve month period into cash equivalents and short-term
investments. The increase in working capital at the end of third
quarter 2003 compared to the fourth quarter 2002 principally
relates to the seasonal increase in accounts receivable as a
result of the pre-Halloween selling period in the third quarter.
Long-term investments were $104,591 as of the third quarter 2003
compared to $116,501 and $103,608 as of the end of the fourth
quarter 2002 and third quarter 2002, respectively.
Net cash provided by operating activities was $27,201 for nine
months 2003 compared to $8,056 for the prior year nine month
2002 period. This change primarily reflects changes in
inventories, prepaid expenses and other assets, and income taxes
payable and deferred.
Capital expenditures for 2003 are anticipated to be generally in
line with historical annualized spending and are to be funded
from the Company's cash flow from operations and internal
sources.
-6B-
Investments in debt securities that matured during the nine
months 2003 and 2002 were generally replaced with debt
securities with maturities greater than one year. During the
third quarter 2003, the Company transferred approximately $26
million of investments to a new money manager in order to better
diversify its investment portfolio. The aforementioned also had
the effect of reclassifying $26 million of investments from
"held to maturity" to "available for sale". This change is not
expected to have material effect on the Company's financial
position or reported net earnings.
The Company repurchased and retired $28,332 and $14,412 of its
shares outstanding during the nine months 2003 and 2002,
respectively. These share repurchases resulted in a slight
reduction in shares outstanding in the 2003 quarter and nine
month period.
This discussion and certain other sections of this Form 10-Q
contain forward-looking statements that are based largely on
the Company's current expectations and are made pursuant to the
safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are subject to
certain risks, trends and uncertainties that could cause actual
results and achievements to differ materially from those
expressed in the forward-looking statements. Such risks, trends
and uncertainties, which in some instances are beyond the
Company's control, include changes in demand and consumer
preferences, including seasonal events such as Halloween; the
effect of ingredient costs; the effect of acquisitions on the
Company's results of operations and financial condition; the
Company's reliance on third-party vendors for various goods and
services; changes in the confectionary market place including
action taken by major retailers and customer accounts; customer
and consumer response to marketing programs and price
adjustments; changes in governmental laws and regulations
including taxes; and the overall competitive environment. The
words "believe," "expect," "anticipate," "estimate," "intend"
and similar expressions generally identify forward-looking
statements. Readers are cautioned not to place undue reliance
on such forward-looking statements, which are as of the date of
this filing.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK:
The Company is exposed to various market risks, including
fluctuations in sugar, corn syrup, edible oils, cocoa and
packaging costs. The Company also invests in securities with
maturities of up to three years, the majority of which are held
to maturity, which limits the Company's exposure to interest
rate fluctuations. There has been no material change in the
Company's market risks that would significantly affect the
disclosures made in the Form 10-K for the year ended December
31, 2002.
-6C-
Item 4. CONTROLS AND PROCEDURES
Under the supervision and with the participation of management,
the chief executive officer and chief financial officer of the
Company have evaluated the effectiveness of the design and
operation of the Company's disclosure controls and procedures as
of September 27, 2003 and, based on their evaluation, the chief
executive officer and chief financial officer have concluded
that these controls and procedures are effective. Disclosure
controls and procedures are designed to ensure that information
required to be disclosed by the Company in the reports that it
files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's
rules and forms. Disclosure controls and procedures are also
designed to ensure that information is accumulated and
communicated to management, including the chief executive
officer and chief financial officer, as appropriate to allow
timely decisions regarding required disclosure.
There has been no change in the Company's internal control over
financial reporting that occurred during the Company's fiscal
quarter ended September 27, 2003 that has materially affected,
or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
-6D-
PART II - OTHER INFORMATION
TOOTSIE ROLL INDUSTRIES, INC.
AND SUBSIDIARIES______
Item 2. Changes in Securities and Use of Proceeds
Sales of unregistered Securities - None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 31.1 and 31.2 - Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Exhibit 32 - Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Form 8-K was furnished on July 23, 2003 containing a press release
announcing second quarter 2003 earnings.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
TOOTSIE ROLL INDUSTRIES, INC.
Date: Nov. 07, 2003 BY: /S/ MELVIN J. GORDON __
Melvin J. Gordon
Chairman of the Board
BY:_/S/_G. HOWARD EMBER, JR.
G. Howard Ember, Jr.
Vice President - Finance
-7-
Exhibit 31.1
CERTIFICATION
I, Melvin J. Gordon, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Tootsie Roll
Industries, Inc,;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the state-
ments made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial infor-
mation included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
Designed such disclosure controls and procedures, or caused such dis-
closure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: November 7, 2003
By: /S/ MELVIN J. GORDON_______________
Melvin J. Gordon
Chairman and Chief Executive Officer
-7A-
Exhibit 31.2
CERTIFICATION
I, G. Howard Ember, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Tootsie Roll
Industries, Inc,;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the state-
ments made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial infor-
mation included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
Designed such disclosure controls and procedures, or caused such dis-
closure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: November 7, 2003
By: /S/ G. HOWARD EMBER, JR.___________
G. Howard Ember, Jr.
Vice President/Finance and
Chief Financial Officer
-7B-
Exhibit 32
Certificate Pursuant to Section 1350 of Chapter 63
Of Title 18 of the United States Code
Each of the undersigned officers of Tootsie Roll Industries, Inc.
Certifies that (i) the Quarterly Report on Form 10-Q of Tootsie Roll
Industries, Inc. for the quarterly period ended September 27, 2003 (the
Form 10-Q) fully complies with the requirements of secton 13(a) or
15(d) of the Securities Exchange Act of 1934 and (ii) the information
contained in the Form 10-Q fairly presents, in all material respects,
the financial condition and results of operations of Tootsie Roll
Industries, Inc. and its subsidiaries.
Dated: Nov. 07, 2003 /S/ MELVIN J GORDON____
MELVIN J GORDON
Chairman and Chief and
Executive Officer
Dated: Nov. 07, 2003 /S/ G. HOWARD EMBER, JR.
G. Howard Ember, Jr.
V.P./Finance and
Chief Financial Officer
-7C-