Attached files
EXHIBIT 99.1
Tootsie Roll Industries, Inc.
7401 South Cicero Avenue
Chicago, IL 60629
Phone 773/838-3400
Fax 773/838-3534
Press Release
STOCK TRADED: NYSE FOR IMMEDIATE RELEASE
TICKER SYMBOL: TR Wednesday, July 25, 2018
CHICAGO, ILLINOIS - July 25, 2018 - Ellen R. Gordon, Chairman,
Tootsie Roll Industries, Inc. reported second quarter and first half
2018 net sales and net earnings.
Second quarter 2018 net sales were $105,623,000 compared to $104,897,000
in second quarter 2017, an increase of $726,000 or 1%. Second quarter 2018
net earnings were $10,489,000 compared to $11,895,000 in second quarter 2017,
and net earnings per share were $.16 and $.18 in second quarter 2018 and 2017,
respectively, a decrease of $.02 or 11%.
First half 2018 net sales were $206,482,000 compared to $208,322,000 in first
half 2017, a decrease of $1,840,000 or 1%. First half 2018 net earnings were
$18,614,000 compared to $21,946,000 in first half 2017, and net earnings per
share were $.29 and $.34 in first half 2018 and 2017, respectively, a decrease
of $.05 per share or 15%.
Mrs. Gordon said, "Although second quarter 2018 sales increased over the
comparable period, the timing of certain sales between second and third quarter
in the comparative 2018 and 2017 periods contributed to this improvement in
second quarter 2018. Second quarter and first half 2018 results were
adversely affected by significant increases in freight and delivery expenses.
Freight and delivery expenses reflect higher freight rates driven by increases
in fuel costs and the continuing imbalance between supply and demand for
over-the-road truck delivery. Increases in manufacturing wages and employee
healthcare and other benefit costs, principally resulting from unfavorable
experience under our self-insurance programs, and higher legal and
professional fees also adversely impacted second quarter and first half 2018
results.
Gross profit margins were adversely affected by product mix and higher
international sales where margins are generally lower. In addition, costs
relating to quality improvements in product packaging and start-up of new
manufacturing packaging lines being phased into service during the second
and third quarters of 2018 also had an unfavorable impact on second quarter
and first half 2018 gross profit margins. The Company is continuing its
investments in its manufacturing operations and products to meet new
consumer and customer demands, achieve quality improvements to increase
consumer product acceptance, and achieve operational efficiencies.
Manufacturing efficiencies driven by capital investments and ongoing cost
containment programs mitigated some of these higher costs and expenses
discussed above.
Second quarter and first half 2018 net earnings benefited from more favorable
foreign exchange and a lower U.S. federal income tax rate resulting from U.S.
tax reform legislation enacted in December 2017. The Company's effective
income tax rate was 23.7% and 27.4% in second quarter 2018 and 2017,
respectively, and 22.9% and 28.3% in first half 2018 and 2017, respectively.
Earnings per share benefited from stock purchases in the open market
resulting in fewer shares outstanding in both second quarter and first
half 2018."
TOOTSIE ROLL INDUSTRIES, INC.
CONSOLIDATED SUMMARY OF SALES & EARNINGS
FOR THE PERIODS ENDED
JUNE 30, 2018 & 2017
SECOND QUARTER ENDED
2018 2017
Net Product Sales $ 105,623,000 $ 104,897,000
Net Earnings $ 10,489,000 $ 11,895,000
Net Earnings Per Share * $ .16 $ .18
Average Shares Outstanding * 64,190,000 65,138,000
SIX MONTHS ENDED
2018 2017
Net Product Sales $ 206,482,000 $ 208,322,000
Net Earnings $ 18,614,000 $ 21,946,000
Net Earnings Per Share * $ .29 $ .34
Average Shares Outstanding * 64,318,000 65,308,000
*Based on average shares outstanding adjusted for 3% stock dividends
distributed April 06, 2018 and April 17, 2017
