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Tootsie Roll Industries. Audit Presentation by KPMG. Table of Contents: . Tootsie Roll Review of Financial Statements Overall Evaluation The Future KPMG & Tootsie Conclusion / Q uestions. Your Company. Favorite candy company Most popular confectionary brands

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tootsie roll industries

Tootsie Roll Industries

Audit Presentation by KPMG

table of contents
Table of Contents:

Tootsie Roll

Review of Financial Statements

Overall Evaluation

The Future

KPMG & Tootsie

Conclusion / Questions

your company
Your Company

Favorite candy company

Most popular confectionary brands

Distribution channels – 75 countries

Strong among every age group, culture, demographic

During every economic climate – truly enduring

Family-run corporate culture

continued
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 profitability

Emphasis on ethics and integrity

Involvement with the community and national concerns

income statement
Income Statement

Total Revenue increased over $22 million

Net Income decreased $164,000

EPS increased from .93 in 2009 to .94 in 2010

Profit margin decreased from 10.87% in 2009 to 10.39% in 2010

Gross profit margin decreased from 36.29% in 2009 to 33.27% in 2010

Times interest earned increased from 265.11 in 2009 to 522.75 in 2010

why did net income decrease
Why did Net Income Decrease?
  • Net earnings benefited from increased sales
  • Cost of Goods Sold increased almost $30 million
    • Cost of sugar and cocoa increase
  • Provision for income taxes increased over $10 million
retained earnings
Retained Earnings

2010 2009

Retained Earnings at beginning of year 148,582 145,123

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 $148,582

Earnings per share $0.94 $0.93

Average Common and Class B Common shares 56,997 57,738

Outstanding

2010: 2009:

Dividends paid for the year $64,884 $50,419

Percent 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
balance sheet
Balance Sheet

Working Capital

Current Ratio

Acid-Test Ratio

Debt to Equity Ratio

2010

$179,086

4.06

2.76

28.62%

2009

155,812

3.78

2.45

27.95%

major changes
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
cash flows
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
our overall evaluation
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 season
  • Overall 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
tootsie s future
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 markets
  • Increase efficiency & eliminate waste
  • Cash and stock dividends – 86 years in a row
about kpmg
About KPMG

U.S. Audit, Tax, and Advisory services firm

Purpose – turn knowledge into value for our clients

Comply with changing regulations and professional standards

Proactive coordination and communication – Chicago office

Provide our teams’ well-built understanding

23,000 employees strong / 144 countries

Risk-based, industry specific, and tailored to our clients

Give you an edge to competitors