Tootsie Roll Industries (TR 1.81%), the confectionery company behind well-known brands like Tootsie Roll, Tootsie Pops, and Dots, reported second quarter 2025 earnings on July 23, 2025. Headline results showed GAAP revenue of $153.2 million in Q2 2025, reflecting a 3.0% year-over-year increase (GAAP). Net earnings (GAAP) reached $17.5 million in Q2 2025, up from $15.6 million in the same period last year, while reported earnings per share (EPS) came in at $0.24 (GAAP), up from $0.21 in the prior period. The ...

TOOTSIE ROLL INDUSTRIES, INC. Exhibit 99.1 7401 South Cicero Avenue Chicago, IL 60629 Phone 773/838-3400 Fax 773/838-3534 PRESS RELEASE First half 2025 net sales were $299,711,000 compared to $300,283,000 in first half 2024, a decrease of $572,000. First half 2025 net earnings were $35,602,000 compared to $31,474,000 in first half 2024, and net earnings per share were $0.49 and $0.43 in first half 2025 and 2024, respectively, an increase of $0.06 per share or 14%. STOCK TRADED: NYSE TICKER SYMBOL: TR Wednes ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 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 Inc ...

Financial Results - Tootsie Roll Industries, Inc. announced its financial results for Q1 2025, ending March 31, 2025[6]. - The company issued a press release detailing its operations and financial condition on April 23, 2025[6]. Report Classification - The report is classified as "furnished" and not "filed" under the Securities Exchange Act of 1934[7]. - The financial statements and exhibits related to the report include Exhibit 99.1, which contains the press release[8]. Management - G. Howard Ember, Jr. serves as the Vice President Finance and Chief Financial Officer of Tootsie Roll Industries, Inc.[12].

Nearly two years ago, back in May of 2023, I wrote my last article about confectionery company Tootsie Roll Industries (NYSE: TR ). In that article, I acknowledged the great fundamental performance that the business had been exhibiting upCrude Value Insights offers you an investing service and community focused on oil and natural gas. We focus on cash flow and the companies that generate it, leading to value and growth prospects with real potential.Subscribers get to use a 50+ stock model account, in-depth ...

Financial Performance - The Company reported consolidated net product sales of $715,530 for the twelve months of 2024, a decrease of $47,722 or 6.3% compared to 2023[71]. - Total revenue for 2024 was $723,217,000, a decrease of 6.0% from $769,365,000 in 2023[159]. - Net earnings attributable to Tootsie Roll Industries, Inc. were $86,827 in twelve months 2024, a decrease from $91,912 in 2023, representing a decline of 4.7%[90]. - Net earnings for 2024 were $86,808,000, a decrease of 5.7% compared to $91,886,000 in 2023[167]. - Net earnings per share for twelve months 2024 were $1.22, down from $1.28 in 2023, a decrease of $0.06 per share[90]. - Product gross margin for 2024 was $247,474,000, representing a slight decrease from $252,515,000 in 2023[159]. - Selling, marketing, and administrative expenses decreased by $2,337 or 1.5% to $152,675 in 2024 compared to 2023[76]. - The Company faced challenges in the Spanish market, with an operating loss of $611 in 2024, slightly improved from a loss of $828 in 2023[79]. Cash Flow and Investments - Cash flows from operating activities totaled $138,889 in 2024, an increase from $94,611 in 2023[67]. - The Company's total cash, cash equivalents, and investments increased to $526,968 as of December 31, 2024, up by $99,940 from $427,028 in 2023[68]. - Cash and cash equivalents increased to $138,841,000 in 2024 from $75,915,000 in 2023[163]. - The Company has invested in a diversified portfolio of highly rated marketable securities, primarily corporate bonds, with maturities generally of three to five years[39]. - The Company’s investments classified as available for sale total $283,060, with maturities structured to limit exposure to interest rate fluctuations[132]. - The Company recorded a favorable change of $5,665 in customer incentive program estimates in 2024, although such adjustments have not historically been material to operating results[114]. Operational Insights - The Company employs approximately 2,300 full-time employees, with seasonal increases in workforce primarily before Halloween[26]. - The Company’s sales are significantly impacted by seasonal demand, particularly during Halloween, Christmas, Easter, and Valentine's Day[35]. - The Company is exploring various programs to increase sales and profitability of its Spanish subsidiary, which is currently experiencing losses[39]. - The Company does not expend material amounts on research and development but focuses on improving existing products and production processes[23]. - The Company maintains ongoing cost reduction and productivity improvement programs, although the outcomes of these initiatives are not accurately predictable[124]. Risks and Challenges - The Company faces risks related to ingredient price volatility, competition, and changing consumer preferences that could adversely affect its financial condition[33]. - The Company is subject to risks related to operational interruptions from software or hardware failures, including potential cyber-attacks[37]. - The Company faces risks associated with climate change that could impact costs and availability of materials needed for manufacturing[37]. - The Company participates in a multi-employer union pension plan that is currently in "critical and declining status," which may lead to significant withdrawal liabilities in the future[39]. Shareholder Information - The Company paid cash dividends of $25,515 in 2024 and plans to continue issuing quarterly cash dividends[67]. - Shareholders' equity rose from $823,422 at December 31, 2023, to $870,743 as of December 31, 2024, reflecting net earnings of $86,827[69]. - The average number of shares outstanding decreased to 71,320 in 2024 from 71,903 in 2023[159]. - The Company repurchased $13,534 worth of common stock in 2024, compared to $33,114 in 2023[106]. - The Company issued a 3% stock dividend, resulting in an increase of 1,196 thousand shares in 2024, compared to 1,185 thousand shares in 2023[213]. Tax and Regulatory Matters - The effective income tax rate for twelve months 2024 was 31.6%, compared to 23.4% in 2023, reflecting the impact of deferred tax asset write-offs[90]. - The provision for income taxes in 2024 was $40,063, compared to $28,008 in 2023[204]. - The Company had unrecognized tax benefits of $2,114 in 2024, compared to $2,313 in 2023[209]. - The Company remains subject to examination by tax authorities for the years 2021 through 2023, with no examinations for years prior to 2020[211].

Financial Performance - Fourth quarter 2024 net sales were $191,356,000, a decrease of 2% from $195,368,000 in fourth quarter 2023[3] - Fourth quarter 2024 net earnings were $22,509,000, down 22% from $29,403,000 in fourth quarter 2023, resulting in earnings per share of $0.32 compared to $0.41[3] - Twelve months 2024 net sales totaled $715,530,000, a decline of 6% from $763,252,000 in twelve months 2023[4] - Twelve months 2024 net earnings were $86,827,000, a decrease of 5% from $91,912,000 in twelve months 2023, with earnings per share of $1.22 compared to $1.28[4] Tax and Adjustments - The company wrote off $11,010,000 of deferred tax assets in fourth quarter 2024, impacting net earnings[5] - Adjusted for the tax asset write-off, fourth quarter 2024 net earnings would have increased by 14% year-over-year[5] Operational Efficiency - Gross profit margins improved due to higher price realization and manufacturing efficiencies, despite lower sales volumes[7] - The company is focused on long-term investments in manufacturing operations to enhance product quality and operational efficiencies[10] Market Outlook - The company anticipates higher cocoa and chocolate costs in 2025 due to expiring supply contracts and new contracts at elevated prices[8] Other Income - Increased investment income and leasing revenue contributed positively to net earnings in fourth quarter 2024[9]

Financial Performance - Net product sales decreased to $223,891 in Q3 2024 from $248,336 in Q3 2023, a decline of 9.8%[63] - Domestic net product sales represented 91.6% of total consolidated net product sales in Q3 2024, with a decrease of 9.7% compared to the prior year[63] - Adjusted earnings from operations were $40,044 in Q3 2024, down 9.4% from $44,215 in Q3 2023[71] - Net earnings attributable to Tootsie Roll Industries, Inc. were $32,844 in Q3 2024, compared to $34,382 in Q3 2023, a decrease of 4.5%[78] Costs and Expenses - Product cost of goods sold decreased to $148,266 in Q3 2024 from $164,163 in Q3 2023, a decrease of 9.9%[64] - Selling, marketing, and administrative expenses increased to $41,825 in Q3 2024 from $39,300 in Q3 2023, an increase of 6.4%[66] - Cocoa and chocolate costs are expected to rise significantly, adversely affecting input costs and margins for the remainder of 2024 and into 2025[65] - The Company is exposed to significant increases in ingredient and packaging costs, particularly in cocoa and chocolate, which have reached unprecedented highs[105] Tax and Earnings Per Share - The consolidated effective tax rate decreased to 22.6% in Q3 2024 from 23.9% in Q3 2023, contributing to higher net earnings[77] - Average shares outstanding decreased from 71,696 in Q3 2023 to 71,379 in Q3 2024, impacting earnings per share positively[78] Future Outlook - The company expects adverse sales trends to continue through the remainder of 2024 and possibly into 2025[63] - The cocoa market is experiencing unprecedented volatility and remains a risk for the intermediate term and possibly longer[105] Pension and Employee Benefits - As of January 1, 2023, the Plan's funded percentage was 47.0%, down from 49.3% in 2022 and 48.5% in 2021, with a market value-adjusted percentage of 43.6%[81] - The number of current active employee Plan participants decreased by 1% from the previous year and 6% over the past two years, reflecting a 55% decline since January 1, 2011[83] - The Company's pension expense for the nine months ended 2024 was $2,579, compared to $2,785 for the same period in 2023, with surcharges of $909 and $982 respectively[87] - The Company received approximately $3.4 billion in Special Financial Assistance from the PBGC in July 2024, aimed at ensuring the Plan's solvency through 2051[88] - The Company expects to use VEBA funds to pay actual costs of employee benefits through part or all of 2027[101] Cash Flow and Investments - Net cash flows from operating activities increased by $30,496, totaling $70,102 for the nine months ended 2024 compared to $39,606 in 2023[94] - Cash used in investing activities was $(32,176) for the nine months ended 2024, with capital expenditures of $13,911 compared to $19,458 in 2023[95] - Aggregate cash and cash equivalents and investments totaled $481,555 at September 30, 2024, up from $427,028 at December 31, 2023[98] - The Company's current ratio was 3.6 to 1 at September 30, 2024, unchanged from December 31, 2023, and improved from 3.2 to 1 at September 30, 2023[97] Expansion Plans - The Company plans a plant expansion with an estimated cost of $70,000 to $80,000 over the next five years to meet projected demand[95] Market Risks - The Company is exposed to exchange rate fluctuations in the Canadian dollar, affecting raw material and packaging costs, as well as labor and local plant operating costs[106] - The Company invests principally in corporate bonds with an average maturity of three to five years to manage its interest rate risk[106] - The Company believes its policies limit exposure to significant interest rate fluctuations, with no material changes in market risks affecting disclosures made in the Form 10-K for the year ended December 31, 2023[107] - The net unrealized loss on available for sale investments was approximately $4,300 and $6,600 at September 30, 2024 and 2023, respectively, reflecting the increase in market interest rates[100] VEBA Trust - The VEBA trust held $16,345, $19,126, and $21,965 of aggregate cash and cash equivalents at September 30, 2024, December 31, 2023, and September 30, 2023, respectively[101] - The Company added $20,000 in additional funding to the VEBA trust in 2023, with no contributions made during the nine months of 2024[101] - The Company has entered into longer-range supply contracts for cocoa and chocolate needs in 2024 and much of 2025 at significantly higher costs than in recent years[105]

Financial Performance - Third quarter 2024 net sales were $223,891,000, a decrease of 10% from $248,336,000 in third quarter 2023[1] - Third quarter 2024 net earnings were $32,844,000, down from $34,382,000 in the same period last year, with earnings per share decreasing by 4% to $0.46[1][2] - Nine months 2024 net sales totaled $524,174,000, an 8% decrease from $567,884,000 in nine months 2023[2] - Nine months 2024 net earnings increased to $64,318,000, up from $62,509,000 in the prior year, with earnings per share rising by 3% to $0.90[2][10] Profitability and Margins - Gross profit margins improved due to higher price realization and manufacturing efficiencies, despite lower sales volumes impacting overall results[3] - The company implemented price increases to recover margin declines, particularly due to rising cocoa and chocolate costs expected to affect margins in the upcoming quarters[4] Income and Taxation - Increased investment income and higher leasing revenue contributed positively to net earnings in both the third quarter and nine months of 2024[5] - The effective income tax rates were 22.6% for third quarter 2024, down from 23.9% in 2023, and 22.4% for nine months 2024, down from 24.1% in 2023[5] Shareholder Metrics - Average shares outstanding decreased to 71,379,000 in third quarter 2024 from 71,696,000 in 2023, contributing to higher earnings per share[9] Strategic Focus - The company continues to focus on long-term investments in manufacturing operations to meet consumer demands and improve operational efficiencies[5]

Core Viewpoint - Tootsie Roll has shown improved execution and results since 2020, yet its share price remains stagnant, reflecting an undervaluation despite solid fundamentals and a strong dividend policy [1][11]. Company Overview - Tootsie Roll Industries, Inc. was established in 1896 and is a prominent producer of candy and chewing gum in the U.S., Canada, and Mexico, with well-known brands such as Tootsie Roll, Blow Pops, and Junior Mints [2]. - The company is controlled by Chairwoman and CEO Ellen R. Gordon, who holds approximately 57.1% of common stock and 84.5% of Class B shares, granting her majority ownership [2]. Revenue and Earnings Growth - Revenue and EPS were stagnant or declining prior to the pandemic, with a significant drop during COVID-19 due to social restrictions and supply chain issues; however, sales have rebounded since then [3]. - The company has experienced a surge in consumer demand for candy and chocolate from 2020 to 2023, aided by increased store traffic and a return to normal social patterns [3]. Financial Performance - Tootsie Roll's revenue reached a record $769.4 million in 2024, driven by price increases to counter inflation, although sales are expected to decline in 2024 due to consumer resistance to higher prices [4]. - Diluted GAAP EPS reached $1.28 in 2023, the highest in a decade, following a low of $0.79 in 2020, indicating substantial improvement [4]. - Despite a projected decline in sales, management's efforts to restore margins and improve manufacturing efficiencies are expected to stabilize profits [4]. Competitive Landscape - Tootsie Roll faces challenges in a confectionery industry dominated by larger competitors like Hershey, M&M Mars, and Nestle, limiting its ability to introduce new products or pursue M&A opportunities [6]. - The company has successfully navigated inflationary pressures and is currently more profitable than before the pandemic, although top-line growth remains a challenge [6]. Competitive Advantages - Tootsie Roll's iconic brands and strong consumer loyalty provide a competitive edge, alongside a robust balance sheet with no long-term debt and $130.12 million in cash and equivalents [7]. - The company typically performs well during economic downturns, maintaining revenue stability during past recessions [7]. Dividend Analysis - The decline in share price has resulted in a dividend yield of 1.21%, which is above the 5-year average of 1.05%, complemented by an annual 3% stock dividend [8][9]. - Tootsie Roll is recognized as a Dividend King, with a 58-year streak of dividend increases, supported by a modest payout ratio of 26% based on estimated 2024 EPS [9]. Valuation - The current share price is approximately $29.72, significantly below the estimated fair value of $40.80, indicating that Tootsie Roll is undervalued [10]. - Sensitivity calculations suggest a fair value range between $39.44 and $42.16, with the stock price representing about 70% to 75% of the fair value estimate [10]. Final Thoughts - Despite a flat share price over the years and concentrated ownership, Tootsie Roll's improved performance post-pandemic, attractive dividend policy, and competitive advantages make it a compelling long-term investment opportunity [11].