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Tootsie Roll Industries

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Presentation on theme: "Tootsie Roll Industries"— Presentation transcript:

1 Tootsie Roll Industries
Audit Presentation by KPMG

2 Review of Financial Statements Conclusion / Questions
Table of Contents: Tootsie Roll Review of Financial Statements Overall Evaluation The Future KPMG & Tootsie Conclusion / Questions

3 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

4 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

5 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 % in 2010 Gross profit margin decreased from 36.29% in 2009 to 33.27% in 2010 Times interest earned increased from in 2009 to in 2010

6 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

7 Retained Earnings Retained Earnings at beginning of year 148, ,123 Net Earnings , ,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, ,738 Outstanding 2010: : Dividends paid for the year $64, $50,419 Percent of net income paid out of cash % % dividends $0.32 of cash dividends paid out to stockholders in both years Paid out cash dividends 86 years in a row

8 Balance Sheet 2010 2009 Working Capital $179,086 155,812 Current Ratio 4.06 3.78 Acid-Test Ratio 2.76 2.45 Debt to Equity Ratio 28.62% 27.95%

9 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

10 Cash Flows Increase in net cash: Operating activities $82, 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

11 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

12 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

13 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

14 Any Questions?

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