Tootsie Roll Industries(US:TR)2025-02-28 20:00Financial 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].