Tootsie Roll Industries(US:TR)2024-05-09 19:00Financial Performance - Net product sales for Q1 2024 were $151,464, a decrease of $9,247 or 5.8% compared to Q1 2023[49] - Domestic net product sales decreased by 7.2% in Q1 2024, while foreign net product sales increased by 9.8%[49] - Adjusted earnings from operations increased by $1,257 or 7.3%, reaching $18,400 in Q1 2024 compared to $17,143 in Q1 2023[57] - Net earnings attributable to Tootsie Roll Industries, Inc. were $15,834 in Q1 2024, an increase from $13,401 in Q1 2023, with earnings per share rising to $0.22 from $0.19[62] Costs and Expenses - Adjusted product cost of goods sold decreased from $111,176 in Q1 2023 to $102,367 in Q1 2024, a decrease of $8,809 or 7.9%[50] - Selling, marketing, and administrative expenses were $38,918 in Q1 2024, an increase from $37,499 in Q1 2023[55] - Customer freight and delivery expenses decreased by $2,617 or 16.1% in Q1 2024 compared to Q1 2023[56] - The Company continues to monitor input costs and has implemented price increases to recover margin declines[54] Tax and Other Income - Other income, net for Q1 2024 was $9,032, compared to $4,780 in Q1 2023, reflecting gains on trading securities[58] - The consolidated effective tax rate decreased to 21.4% in Q1 2024 from 23.8% in Q1 2023[61] Cash Flow and Investments - Net cash flows from operating activities increased by $28,883, reaching $21,401 in Q1 2024 compared to $(7,482) in Q1 2023, primarily due to higher net earnings and favorable changes in working capital[75] - Cash used in investing activities was $(20,002) in Q1 2024, down from $5,495 in Q1 2023, reflecting significant purchases of available for sale securities totaling $27,297 in Q1 2024[76] Future Plans and Investments - The company plans a plant expansion with an estimated total cost of $70,000 to $80,000 over the next five years, primarily funded by cash flow from operations[76] - The company is focused on long-term investments in manufacturing operations to meet new consumer demands and improve operational efficiencies[73] Liquidity and Financial Position - The current ratio improved to 3.8:1 at March 31, 2024, compared to 3.6:1 at December 31, 2023, indicating strong liquidity[78] - Bank borrowings were $1,050 at March 31, 2024, slightly down from $1,060 at March 31, 2023, indicating stable debt levels[77] Employee Benefits and Trusts - The VEBA trust held $19,258 in cash and cash equivalents at March 31, 2024, compared to $3,917 at March 31, 2023, reflecting increased funding for employee benefits[81] - The company added $20,000 in funding to the VEBA trust in 2023, with no contributions made in Q1 2024[80] Market and Investment Risks - The net unrealized loss on available for sale investments decreased to approximately $2,200 at March 31, 2024, from $6,900 at March 31, 2023, due to rising market interest rates[79] - The company is unable to determine the ultimate outcome of the multi-employer union pension matter, which could materially affect future consolidated results[73]