Download - Tootsie Roll Industries
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AUDIT PRESENTATION BY KPMG
Tootsie Roll Industries
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TOOTSIE ROLL REVIEW OF FINANCIAL STATEMENTS
OVERALL EVALUATIONTHE FUTURE
KPMG & TOOTSIECONCLUSION / QUESTIONS
Table of Contents:
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Your Company
Favorite candy companyMost popular confectionary brandsDistribution channels – 75 countriesStrong among every age group, culture,
demographicDuring every economic climate – truly
enduringFamily-run corporate culture
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Continued…
Fiscally responsible focus – “America’s 200 Best Small Companies” by Forbes Magazine
Highest ethical business standards – “100 Best Corporate Citizens” by Business Ethics Magazine
Focus on high profitabilityEmphasis on ethics and integrity Involvement with the community and national
concerns
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Income Statement
Total Revenue increased over $22 millionNet Income decreased $164,000 EPS increased from .93 in 2009 to .94 in
2010Profit margin decreased from 10.87% in 2009
to 10.39% in 2010Gross profit margin decreased from 36.29%
in 2009 to 33.27% in 2010Times interest earned increased from 265.11
in 2009 to 522.75 in 2010
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Why did Net Income Decrease?
Net earnings benefited from increased salesCost of Goods Sold increased almost $30
million Cost of sugar and cocoa increase
Provision for income taxes increased over $10 million
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Retained Earnings
Retained Earnings at beginning of year 148,582145,123 Net Earnings 53,714 53,878 Cash Dividends (18,078)(17,790) Stock Dividends (46,806)(32,629)Retained Earnings at the end of year $137,412
$148,582Earnings per share $0.94$0.93Average Common and Class B Common shares 56,99757,738 Outstanding
2010 2009
2010: 2009:Dividends paid for the year $64,884 $50,419Percent of net income paid out of cash 33.67% 33.02% dividends
• $0.32 of cash dividends paid out to stockholders in both years
• Paid out cash dividends 86 years in a row
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Balance Sheet
Working
CapitalCurrent RatioAcid-Test RatioDebt to Equity
Ratio
2010$179,086
4.062.76
28.62%
2009
155,8123.782.45
27.95%
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Major Changes
• Cash and cash equivalents increased almost $25 million
• Added over $10 million in machinery and equipment
• Liability for uncertain tax positions decreased almost $10 million
• Capital in excess of par value increased over $23 million
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Cash Flows
Increase in net cash: Operating activities $82,805 - 2010 compared to $76,994 – 2009 Net earnings benefited from increased sales No gain because of increased costs
Investing activities - capital expenditures of $12,813 Showing continual reinvestment Plant, equipment, and information technology Not as must sale and maturity of securities
From financing activities - paid cash dividends of $18,130 and purchased and retired $22,881 of its outstanding shares Treasury stock Able to do more of both
Cash increased because of increased sales (operating activities): Reached new groups of customers New marketing plans Great Halloween season
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Our Overall Evaluation
Net product sales in 2010 reached $517 million A record for the Company Increase of $22 million over 2009 net product sales Equals about 4.3%
Another strong Halloween selling seasonOverall financial position remains very strong-
Net product sales Net earnings Related cash flows provided by operating activities
Cash flows from operations plus maturities of short-term investments - adequate to meet the Company’s overall financing needs in 2011
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Tootsie’s Future
Key competitive advantage- Well-known brands High volume for Retailers Attractive value for customers
Entry into digital marketing = new opportunities
Kosher certified open new marketsIncrease efficiency & eliminate wasteCash and stock dividends – 86 years in a row
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About KPMG
U.S. Audit, Tax, and Advisory services firmPurpose – turn knowledge into value for our clientsComply with changing regulations and professional
standardsProactive coordination and communication –
Chicago officeProvide our teams’ well-built understanding23,000 employees strong / 144 countriesRisk-based, industry specific, and tailored to our
clientsGive you an edge to competitors
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Any Questions?