This financial review discusses the Company's financial condition, results of
operations, liquidity and capital resources and other matters. Dollars are
presented in thousands, except per share amounts. This review should be read in
conjunction with the accompanying Condensed Consolidated Financial Statements
and related notes included in this Form 10-Q and with the Company's Consolidated
Financial Statements and related notes and Management's Discussion and Analysis
of Financial Condition and Results of Operations included in the Company's Form
10-K for the year ended December 31, 2019 (the "2019 Form 10-K").
Net product sales were $79,796 in second quarter 2020 compared to $106,021 in
second quarter 2019, a decrease of $26,225 or 24.7%. First half 2020 net product
sales were $182,599 compared to $207,040 in first half 2019, a decrease of
$24,441 or 11.8%. Second quarter 2020 sales were adversely impacted by the
Covid-19 pandemic, including the closure of "nonessential" business,
"shelter-in-place" mandates and public health guidelines issued by state, local,
federal and foreign governments. The "closing" of the economy, and its gradual
"reopening", has curtailed and at times completely closed certain channels of
trade where the Company has historically sold its products. Response to this
pandemic has resulted in the disruption and changes in lifestyles and shopping
habits which has adversely affected planned consumer purchases of the Company's
products for "sharing" and "give away" occasions, as well as impulse purchases
of the Company's products at retail outlets. Domestic (U.S.) sales in second
quarter and first half 2020 declined 22.9% and 10.2%, respectively, compared to
the corresponding periods in the prior year. Foreign sales, including exports to
foreign markets, had a greater rate of decline than domestic sales in the
comparative periods.
Product cost of goods sold were $50,379 in second quarter 2020 compared to
$65,945 in second quarter 2019, and first half 2020 product cost of goods sold
were $116,822 compared to $130,801 in first half 2019. Product cost of goods
sold includes $339 and $66 of certain deferred compensation expenses in second
quarter 2020 and 2019, respectively, and $20 and $246 of certain deferred
compensation expenses in first half 2020 and 2019, respectively. These deferred
compensation expenses principally result from the changes in the market value of
investments and investment income from trading securities relating to
compensation deferred in previous years and are not reflective of current
operating results. Adjusting for the aforementioned, product cost of goods sold
decreased from $65,879 in second quarter 2019 to $50,040 in second quarter 2020,
a decrease of $15,839 or 24.0%; and decreased from $130,555 in first half 2019
to $116,802 in first half 2020, a decrease of $13,753 or 10.5%. As a percentage
of net product sales, adjusted product cost of goods sold was 62.7% and 62.1% in
second quarter 2020 and 2019, respectively, an unfavorable increase of 0.6
percentage points; and adjusted product cost of goods sold was 64.0% and 63.1%
in first half 2020 and 2019, respectively, an unfavorable increase of 0.9
percentage points. Lower sales and production volumes had an unfavorable impact
on plant manufacturing overhead costs and resulting gross profit margins because
these costs are primarily fixed and recurring each year, and only partially
decline with lower volumes. These higher plant overhead costs as a percentage of
net product sales were the principal drivers of the above discussed higher
adjusted product cost of goods sold as a percentage of sales. Certain cost and
expense reductions, which include Company initiatives to reduce costs, partially
offset the decrease in second quarter and first half 2020 gross profit margins.
The Company is continuing to make investments in plant manufacturing operations
to meet new consumer and customer demands, achieve product quality improvements,
increase operational efficiencies and provide genuine value to consumers.
Selling, marketing and administrative expenses were $29,559 in second quarter
2020 compared to $28,216 in second quarter 2019, and first half 2020 selling,
marketing and administrative expenses were $45,831 compared to $59,324 in first
half 2019. Selling, marketing and administrative expenses include $9,079 and
$1,767 of certain deferred compensation expenses in second quarter 2020 and
2019, respectively, and $23 and $6,590 of certain deferred compensation expenses
in first half 2020 and 2019, respectively. As discussed above, these expenses
principally result from changes in the market value of investments and
investment income from trading securities relating to compensation deferred in
previous years, and are not reflective of current operating results. Adjusting
for the aforementioned deferred compensation expenses, selling, marketing and
administrative expenses decreased from $26,449 in second quarter 2019 to $20,480
in second quarter 2020, a decrease of $5,969 or 22.6%; and selling, marketing
and administrative expenses decreased from $52,734 in first half 2019 to $45,808
in first half 2020 a
17
Table of Contents
decrease of $6,926 or 13.1%. As a percentage of net product sales, adjusted
selling, marketing and administrative expenses increased from 24.9% in second
quarter 2019 to 25.7% in second quarter 2020, an unfavorable increase of 0.8
percentage points as a percent of net sales, and adjusted selling, marketing and
administrative expenses decreased from 25.5% in first half 2019 to 25.1% in
first half 2020, a favorable decrease of 0.4 percentage points as a percent of
net sales. The increase in adjusted selling, marketing and administrative
expenses as a percentage of net product sales in second quarter 2020 principally
reflects the adverse effects of certain fixed selling, marketing and
administrative expenses against significantly lower sales in second quarter 2020
compared to 2019. Decreases in certain selling, marketing and administrative
expenses, including Company travel and initiatives to reduce expenses, partially
offset the increase in second quarter and first half 2020 expenses. Selling,
marketing and administrative expenses include $8,397 and $11,185 for customer
freight, delivery and warehousing expenses in second quarter 2020 and 2019,
respectively, a decrease of $2,788 or 24.9%. These expenses were $19,069 and
$22,217 in first half 2020 and 2019, respectively, a decrease of $3,148 or
14.2%. These expenses were 10.5% of net product sales in both second quarter
2020 and 2019, and were 10.4% and 10.7% of net product sales in first half 2020
and 2019, respectively.
Earnings from operations were $493 in second quarter 2020 compared to $12,515 in
second quarter 2019, and were $21,237 in first half 2020 compared to $18,273 in
first half 2019. Earnings from operations include $9,418 and $1,833 of certain
deferred compensation expenses in second quarter 2020 and 2019; respectively,
and include $43 and $6,836 of certain deferred compensation expenses in first
half 2020 and 2019, respectively, which are discussed above. Adjusting for these
deferred compensation costs and expenses, earnings from operations were $9,911
and $14,348 in second quarter 2020 and 2019, respectively, a decrease of $4,437
or 30.9%; and adjusted operating earnings were $21,280 and $25,109 in first half
2020 and 2019, respectively, a decrease of $3,829 or 15.2%. As a percentage of
net product sales, these adjusted operating earnings were 12.4% and 13.5% in
second quarter 2020 and 2019, respectively, an unfavorable decrease of 1.1
percentage points as a percentage of net product sales; and as a percentage of
net product sales, these adjusted operating earnings were 11.7% and 12.1% in
first half 2020 and 2019, respectively, an unfavorable decrease of 0.4
percentage points as a percentage of net product sales. The decrease in adjusted
operating earnings in both second quarter and first half 2020 principally
reflects the negative impact of lower sales, including the effects of lower
gross profit margins, as discussed above.
Management believes the comparisons presented in the preceding paragraphs, after
adjusting for changes in deferred compensation, are more reflective of the
underlying operations of the Company.
Other income, net was $9,727 in second quarter 2020 compared to $3,053 in second
quarter 2019, a favorable increase of $6,674; and other income, net, was $4,233
in first half 2020 compared to $9,070 in first half 2019, an unfavorable
decrease of $4,837. Other income, net for second quarter 2020 and 2019 includes
net gains and investment income of $9,418 and $1,833, respectively, on trading
securities which provide an economic hedge of the Company's deferred
compensation liabilities; and other income, net for first half 2020 and 2019
includes net gains and investment income of $43 and $6,836, respectively, on
trading securities. These changes in trading securities were substantially
offset by a like amount of deferred compensation expense included in product
cost of goods sold and selling, marketing, and administrative expenses in the
respective periods as discussed above. Other income, net for second quarter 2020
and 2019 includes investment income on available for sale securities of $920 and
$1,109 in 2020 and 2019, respectively; and other income, net for first half 2020
and 2019 includes investment income on available for sale securities of $2,101
and $2,181 in 2020 and 2019, respectively. Other income (loss), net also
includes gains (losses) on foreign exchange of $(849) and $(211) in second
quarter 2020 and 2019, respectively, and $1,661 and $(446) in first half 2020
and 2019, respectively.
The consolidated effective tax rates were 27.8% and 25.8% in second quarter 2020
and 2019, respectively, and 24.0% and 25.2% in first half 2020 and 2019,
respectively. The changes in tax rates in 2020 compared to 2019 in the second
quarter and first half principally reflect changes in state income tax expense.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES")
Act was signed into law. The CARES Act provides a substantial stimulus and
assistance package intended to address the impact of the Covid-19 pandemic,
including tax relief and government loans, grants and investments. The Canadian
government also has enacted a stimulus program to respond to the economic impact
of Covid-19. The Company's financial results in second quarter 2020 did reflect
some benefits from these stimulus programs. The U.S. government is expected to
enact additional stimulus legislation in third quarter 2020 but the Company
cannot predict what impact, if any, such additional stimulus would
18
Table of Contents
have on the Company's operating results. The Company continues to monitor any
effects and related benefits that may result from the CARES Act and successor
programs as well as foreign stimulus programs.
Net earnings attributable to Tootsie Roll Industries, Inc. were $7,388 (after $6
net loss attributed to non-controlling interests) in second quarter 2020
compared to $11,556 (after $12 net loss attributed to non-controlling interests)
in second quarter 2019, and earnings per share were $0.11 and $0.17 in second
quarter 2020 and 2019, respectively, a decrease of $0.06 per share, or 35.3%.
First half 2020 net earnings attributable to Tootsie Roll Industries, Inc. were
$19,370 (after $12 net loss attributed to non-controlling interests) compared to
first half 2019 net earnings of $20,511 (after $56 net loss attributed to
non-controlling interests), and net earnings per share were $0.29 and $0.30 in
first half 2020 and first half 2019, respectively, a decrease of $0.01 per share
or 3.3%. Net earnings in second quarter and first half 2020 were principally
impacted by the decline in sales as discussed above. Earnings per share
attributable to Tootsie Roll Industries, Inc. for second quarter and first half
2020 benefited from the reduction in average shares outstanding resulting from
purchases in the open market by the Company of its common stock. Average shares
outstanding decreased from 67,501 at second quarter 2019 to 66,671 at second
quarter 2020, and from 67,664 in first half 2019 to 66,781 in first half 2020.
Goodwill and intangibles, principally trademarks, are assessed annually as of
December 31 or whenever events or circumstances indicate that the carrying
values may not be recoverable from future cash flows. The Company has not
identified any triggering events, as defined, or other adverse information that
would indicate a material impairment of its goodwill or intangibles in first
half 2020. The Company's trademarks have indefinite lives and Company management
believes that the adverse effects of the Covid-19 pandemic on sales are
temporary and do not significantly affect our business model and long-term
strategy. Therefore, we do not consider COVID-19 to be a triggering event to
accelerate our annual impairments testing. There were no impairments in the
comparative first half 2019 period or in calendar year 2019. Although Company
management has not identified any trigging events at this time relating to its
intangibles the ultimate effects of the Covid-19 pandemic could change this
assessment in the future, as discussed below and as outlined in the Company's
risk factors discussed on Form 10-K for the year ended December 31, 2019.
Beginning in 2012, the Company received periodic notices from the Bakery,
Confectionery, Tobacco Workers and Grain Millers International Union Pension
Plan (Plan), a multi-employer defined benefit pension plan for certain Company
union employees, that the Plan's actuary certified the Plan to be in "critical
status", the "Red Zone", as defined by the Pension Protection Act (PPA) and the
Pension Benefit Guaranty Corporation (PBGC); and that a plan of rehabilitation
was adopted by the trustees of the Plan in 2012. During 2015, the Company
received notices that the Plan's status was changed to "critical and declining
status", as defined by the PPA and PBGC, for the plan year beginning January 1,
2015, and that the Plan was projected to have an accumulated funding deficiency
for the 2017 through 2024 plan years. A designation of "critical and declining
status" implies that the Plan is expected to become insolvent in the next 20
years. The Company has continued to receive annual notices each year (2016
through 2020) that this Plan remains in "critical and declining status" and is
projected to become insolvent within the next 20 years. These notices have also
advised that the Plan trustees were considering the reduction or elimination of
certain retirement benefits and may seek assistance from the PBGC. Plans in
"critical and declining status" may elect to suspend (temporarily or
permanently) some benefits payable to all categories of participants, including
retired participants, except retirees that are disabled or over the age of 80.
Suspensions must be equally distributed and cannot drop below 110% of what would
otherwise be guaranteed by the PBGC.
Based on these updated notices, the Plan's funded percentage (plan investment
assets as a percentage of plan liabilities), as defined, were 50.4%, 51.6%, and
54.7% as of the most recent valuation dates available, January 1, 2019, 2018,
and 2017, respectively (these valuation dates are as of the beginning of each
Plan year). These funded percentages are based on actuarial values, as defined,
and do not reflect the actual market value of Plan investments as of these
dates. If the market value of investments had been used as of January 1, 2020
the funded percentage would be 48.8% (not 50.4%). Given the recent declines in
the equity markets due to the Covid-19 pandemic, the current funded percentage
is likely much lower than the aforementioned 48.8%. As of the January 1, 2019
valuation date (most recent valuation available), only 16% of Plan participants
were current active employees, 53% were retired or separated from service and
receiving benefits, and 31% were retired or separated from service and entitled
to future benefits. The number of current active employee Plan participants as
of January 1, 2019 fell 14% from the previous year and 17% over the past two
years. When compared to the Plan valuation date of January 1, 2011 (seven years
earlier), current active employee participants have declined 47%, whereas
participants who were retired or
19
Table of Contents
separated from service and receiving benefits increased 4% and participants who
were retired or separated from service and entitled to future benefits increased
14%. The Company understands that the Plan is continuing to explore additional
restructuring measures which include incentives to participating employers in
exchange for providing additional future cash contributions as well as
suspension of certain retirement benefits.
The Company has been advised that its withdrawal liability would have been
$99,800, $81,600, and $82,200 if it had withdrawn from the Plan during 2019,
2018 and 2017, respectively. The increase from 2018 to 2019 was mainly
attributable to a decrease in the Plan's assets during 2018, net of market
returns, and the withdrawal of a large contributing employer where their actual
withdrawal payments (likely over 20 years as discussed below) are not enough to
fully fund their actual withdrawal liability. The Company's relative share of
the Plan's contribution base, driven by employer withdrawals, has increased for
the last several years, and Management believes that this trend could continue
indefinitely which will add upward pressure on the Company's withdrawal
liability. Based on the above, including the Plan's projected insolvency in the
year 2030, Management believes that the Company's withdrawal liability could
increase further in future years.
Based on the Company's updated actuarial study and certain provisions in ERISA
and the law relating to withdrawal liability payments, Management believes that
the Company's liability would likely be limited to twenty annual payments of
$3,045 which have a present value in the range of $35,700 to $46,700 depending
on the interest rate used to discount these payments. While the Company's
actuarial consultant does not believe that the Plan will suffer a future mass
withdrawal (as defined) of participating employers, in the event of a mass
withdrawal, the Company's annual withdrawal payments would theoretically be
payable in perpetuity. Based on the Company's updated actuarial study, the
present value of such perpetuities is in the range of $49,900 to $104,500 and
would apply in the unlikely event that substantially all employers withdraw from
the Plan. The aforementioned is based on a range of valuations and interest
rates which the Company's actuary has advised is provided under the statute.
Should the Company actually withdraw from the Plan at a future date, a
withdrawal liability, which could be higher than the above discussed amounts,
could be payable to the Plan.
The Company and the union concluded a new labor contract in 2018 which requires
the Company's continued participation in this Plan through September 2022. The
amended rehabilitation plan, which also continues, requires that employer
contributions include 5% compounded annual surcharge increases each year for an
unspecified period of time beginning in 2012 as well as certain plan benefit
reductions. The Company's pension expense for this Plan for first half 2020 and
2019 was $1,504 and $1,548, respectively, which includes surcharges of $530 and
$496, respectively, as required under the amended rehabilitation plan. Such
surcharges for calendar years 2019 and 2018 were $948 and $811, respectively.
The Company understands that the U.S Congress and the U.S Senate have proposed
various legislation, including the "Butch Lewis Act," that would provide varying
degrees of assistance to troubled multi-employer plans similar to this Plan,
including long-term low interest loans to troubled multi-employer plans. Certain
provisions proposed would change the withdrawal liability rules which could
increase the Company's obligation in the event that the Company withdrew from
this Plan, resulting in higher annual payment amounts and payments for a longer
period of time in excess of the maximum twenty year period discussed above. The
Company is currently unable to determine the ultimate outcome of the above
discussed multi-employer union pension matter and therefore is unable to
determine the effects on its consolidated financial statements, but the ultimate
outcome could be material to its consolidated results of operations or cash
flows in one or more future periods. See also Note 7 in the Company's
Consolidated Financial Statements on Form 10-K for the year ended December 31,
2019.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flows provided by operating activities were $10,880 and $11,021 in
first half 2020 and 2019, respectively, an unfavorable decrease of $141. The
decrease in first half 2020 cash flows from operating activities principally
reflects decreased net earnings offset by the change in income taxes payable as
well as the timing of sales and collections of accounts receivable trade.
Net cash used in investing activities was $17,271 in first half 2020 compared to
$33,662 in first half 2019. Cash flows used in investing activities reflect
$53,269 and $33,558 of purchases of available for sale securities during first
half 2020 and 2019, respectively, and $44,466 and $12,120 of sales and
maturities of available for sale securities
20
Table of Contents
during first half 2020 and 2019, respectively. First half 2020 and 2019
investing activities include capital expenditures of $6,410 and $9,945,
respectively. Company Management has committed approximately $25,000 to a
rehabilitation upgrade and expansion of one of its manufacturing plants in the
U.S.A. The Company spent approximately $2,400 in 2019, and Management's
projected cash outlays for this project are approximately $12,600 in 2020 and
$10,000 in 2021. All capital expenditures are to be funded from the Company's
cash flow from operations and internal sources including available for sale
securities.
The Company's consolidated financial statements include bank borrowings of $864
and $686 at June 30, 2020 and 2019, respectively, all of which relates to its
Spanish subsidiary. The Company had no other outstanding bank borrowings at June
30, 2020.
Financing activities include Company common stock purchases and retirements of
$12,959 and $19,186 in first half 2020 and 2019, respectively. Cash dividends of
$11,853 and $11,699 were paid in first half 2020 and 2019, respectively.
The Company's current ratio (current assets divided by current liabilities) was
3.8 to 1 at June 30, 2020 compared to 4.4 to 1 at December 31, 2019 and 4.7 to 1
at June 30, 2019. Net working capital was $238,517 at June 30, 2020 compared to
$273,786 and $220,802 at December 31, 2019 and June 30, 2019, respectively. The
aforementioned net working capital amounts are principally reflected in
aggregate cash and cash equivalents and short-term investments of $186,385 at
June 30, 2020 compared to $239,404 and $140,560 at December 31, 2019 and June
30, 2019, respectively. In addition, long term investments, principally debt
securities comprising corporate bonds, were $186,057 at June 30, 2020, as
compared to $153,031 and $195,359 at December 31, 2019 and June 30, 2019,
respectively. Aggregate cash and cash equivalents and short and long-term
investments were $372,442, $392,435, and $335,919, at June 30, 2020, December
31, 2019 and June 30, 2019, respectively. The aforementioned includes $78,285,
$76,183, and $71,375 at June 30, 2020, December 31, 2019 and June 30, 2019,
respectively, relating to trading securities which are used as an economic hedge
for the Company's deferred compensation liabilities. Investments in available
for sale securities, primarily high quality corporate bonds, that matured during
first half 2020 and 2019 were generally used to purchase the Company's common
stock or were replaced with debt securities of similar maturities.
The Company periodically contributes to a VEBA trust, managed and controlled by
the Company, to fund the estimated future costs of certain employee health,
welfare and other benefits. The Company is currently using these VEBA funds to
pay the actual cost of such benefits through most of 2022. The VEBA trust held
$10,639, $12,085 and $14,674 of aggregate cash and cash equivalents at June 30,
2020, December 31, 2019 and June 30, 2019, respectively. This asset value is
included in prepaid expenses and long-term other assets in the Company's
Consolidated Statement of Financial Position. These assets are categorized as
Level 2 within the fair value hierarchy.
COVID-19 PANDEMIC
On March 11, 2020, the World Health Organization designated the recent novel
coronavirus ("COVID-19") as a global pandemic. We continue to actively monitor
COVID-19 and its potential impact on our operations and financial results,
prioritizing employee health and safety. To date, there has not been any
material disruption to our supply chain or our manufacturing capabilities that
has materially affected our ability to meet sales demands.
The Covid-19 pandemic, and resulting "shelter in place" and closures of
"nonessential" businesses by many state and local governments, as well as
foreign governments, has had a significant adverse impact on the overall
economy. The aforementioned has resulted in the curtailment or complete closing
of certain trade channels where our products are distributed as well as
resulting changes in consumer behavior and shopping habits. Many of the
Company's products are larger confectionary products where a high value is
provided to consumers, and such products are often consumed at many "sharing"
and "give-a-way" events including group gatherings and activities. However, many
of these consumption occasions as well as impulse purchases of our products have
been significantly affected or completely curtailed by "shelter in place"
mandates, public health guidelines, and consumer fears of returning to their
previous lifestyles. As a result, the Company has experienced significant
declines in both second quarter 2020 sales, and in its customer orders and sales
to date in third quarter 2020 compared to the corresponding periods in 2019.
Although the downward sales trend in third quarter 2020 has lessened as steps
are
21
Table of Contents
taken to "reopen our economy", the Company expects this adverse sales trend to
have a material adverse effect on sales and net earnings in third quarter 2020,
and possibly fourth quarter 2020.
The Company's third quarter period is historically its largest quarterly sales
period because it also includes pre-Halloween seasonal sales which are very
significant in the third quarter. Should Halloween activities not materialize
this year, our Halloween sales and/or consumer purchases of our products at
retail could be materially adversely affected, including costs relating to
customer returns and/or significant price discounting and mark-downs at retail.
The effects of this pandemic are unprecedented and its future effects, including
the "reopening up the economy", are very uncertain. Therefore, the Company is
not able to predict the effects of this pandemic on the second half of 2020 and
beyond.
Although the Company has not yet experienced any material disruptions to its
business, the Covid-19 pandemic could also result in the following:
Disruption to supply chain resulting in the unavailability or untimely delivery
? of raw materials and supplies as well as key services by third parties for the
manufacture and distribution of products.
Disruption to manufacturing due to plant closures which could result in a lack
of labor and supervision because of employee Covid-19 positive tests or related
? quarantine of employees, excessive sickness, fears or unwillingness of
employees to come to work, union demands and resistance to work, or closures
mandated by local, state or federal governmental authorities.
? Disruption to shipping and delivery of inventory, supplies and products to
distribution centers and customers where third-party carriers are used.
Changes in consumer attitudes and participation in key holidays and seasonal
? events, including Halloween which has historically comprised approximately 50%
of third quarter sales.
Deteriorating economic conditions, which are discussed below and in the Company
? Risk Factors on Form 10-K for the year ended December 31, 2019, including high
unemployment, declining consumer confidence and spending, and effects of lower
GDP, any of which could change the demand for one or more of our products.
Impairment in the carrying value of trademarks should the adverse effects of
? the Covid-19 have a long-term effect on sales which could result from changes
in consumer behavior, lifestyles, and shopping habits and some or all changes
become permanent.
We have prioritized the safety of our employees and therefore the Company has
taken many steps to provide our employees with a safe and healthy work
environment, including increased sanitation, social distancing measures at all
Company locations, having office employees work remotely, curtailing visitors at
Company locations, and limiting all airline and other travel by employees.
Because the Company has a sizable investment in marketable securities (see
Liquidity and Capital Resources section above) it is well positioned financially
to respond to the adverse effects of this pandemic in the short-term, as well as
for a longer period of time if necessary.
ACCOUNTING PRONOUNCEMENTS
See Note 1 of the Company's Condensed Consolidated Financial Statements.
FORWARD-LOOKING STATEMENTS
This discussion and certain other sections contain forward-looking statements
that are based largely on the Company's current expectations and are made
pursuant to the safe harbor provision of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be identified by the use of
words such as "anticipated," "believe," "expect," "intend," "estimate,"
"project," "plan" and other words of similar meaning in connection with a
discussion of future operating or financial performance and are subject to
certain factors, risks, trends and uncertainties that could cause actual results
and achievements to differ materially from those expressed in the
forward-looking statements. Such factors, risks, trends and uncertainties, which
in some instances are beyond the Company's control, include the overall
competitive environment in the Company's industry, changes in assumptions
22
Table of Contents
and judgments discussed above under the heading "Significant Accounting Policies
and Estimates," and factors identified and referred to above under the heading
"Risk Factors" in this report and under the heading "Risk Factors" in the
Company's 2019 Form 10-K.
The risk factors identified and referred to above, including the effects of the
Covid-19 pandemic, are believed to be significant factors, but not necessarily
all of the significant factors that could cause actual results to differ from
those expressed in any forward-looking statement. Readers are cautioned not to
place undue reliance on such forward-looking statements, which are made only as
of the date of this report. The Company undertakes no obligation to update such
forward-looking statements.
© Edgar Online, source Glimpses
TOOTSIE ROLL INDUSTRIES, INC. 
