On this page of StockholderLetter.com we present the 3/25/2024 shareholder letter from TOOTSIE ROLL INDUSTRIES INC — ticker symbol TR. Reading current and past TR letters to shareholders can bring important insights into the investment thesis.
CHKSUM Content: No Content Layout: 4010 Graphics: 13495 CLEAN 2023 30750 Tootsie Roll Covers.indd 1 3/4/21 2:19:02 PM
Corporate Profile Tootsie Roll Industries, Inc. has been engaged in the manufacture and sale of confectionery products for over 125 years. Our products are primarily sold under the familiar brand names: Tootsie Roll, Tootsie Roll Pops, Caramel Apple Pops, Child s Play, Charms, Blow Pop, Blue Razz, Cella s chocolate covered cherries, Dots, Crows, Junior Mints, Junior Caramels, Charleston Chew, Sugar Daddy, Sugar Babies, Andes, Fluffy Stuff cotton candy, Dubble Bubble, Razzles, Cry Baby, Nik-L-Nip and Tutsi (Mexico). Corporate Principles We believe that the differences among companies are attributable to the caliber of their people, and therefore we strive to attract and retain superior people for each job. We believe that an open, family atmosphere at work combined with professional management fosters cooperation and enables each individual to maximize his or her contribution to the Company and realize the corresponding rewards. We do not jeopardize long-term growth for immediate, short-term results. We maintain a conservative financial posture in the deployment and management of our assets. We invest in the latest and most productive equipment to deliver the best quality product to our customers at the lowest cost. We seek to outsource functions where appropriate and to vertically integrate operations where it is financially advantageous to do so. We view our well known brands as prized assets to be aggressively advertised and promoted to each new generation of consumers. We conduct business with the highest ethical standards and integrity which are codified in the Company s Code of Business Conduct and Ethics. We run a trim operation and continually strive to eliminate waste, minimize cost and implement performance improvements. Financial Highlights 2023 December 31, Board of Directors Offices, Plants Ellen R. Gordon Executive Offices 7401 South Cicero Avenue Chicago, Illinois 60629 www.tootsie.com Plants/Warehouses Illinois Tennessee Massachusetts Wisconsin Ontario, Canada Mexico City, Mexico Barcelona, Spain Foreign Sales Offices Mexico City, Mexico Ontario, Canada Chairman of the Board and Chief Executive Officer Private Investor Virginia L. Gordon Lana Jane Lewis-Brent(1)(2) President, Paul Brent Designer, Inc., an art publishing, design and licensing company Barre A. Seibert(1)(2) Retired First Vice President, Washington Mutual Bank Paula M. Wardynski(1)(2) Former Senior Vice President Finance, Twenty-First Century Fox Audit Committee (1) Barcelona, Spain Compensation Committee (2) Other Information Officers Ellen R. Gordon Chairman of the Board and Chief Executive Officer G. Howard Ember, Jr. Vice President, Finance & Chief Financial Officer Stephen P. Green Vice President, Manufacturing Kenneth D. Naylor Vice President, Marketing & Sales Henry G. Mills Vice President, Business Development Barry P. Bowen Treasurer & Assistant Secretary Robert L. Zirk Controller Stock Exchange New York Stock Exchange, Inc. (Since 1922) Stock Identification Ticker Symbol: TR CUSIP No. 890516 10-7 Stock Transfer Agent and Stock Registrar Equiniti Trust Company, LLC ( EQ ) 48 Wall Street, Floor 23 New York, NY 10005 1-800-710-0932 https://equiniti.com/us/ ast-access Independent Registered Public Accounting Firm Grant Thornton LLP 171 North Clark Street, Suite 200 Chicago, Illinois 60601 General Counsel Aronberg Goldgehn Davis & Garmisa 225 West Washington Street, Suite 2800 Chicago, Illinois 60606 Annual Meeting May 6, 2024 One James Center, Suite 200 901 East Cary Street Richmond, Virginia 23219 2022 (in thousands except per share data) Net Product Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Earnings Attributable to Tootsie Roll Industries, Inc. . . . . . . . . . . . . . . . . . Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shareholders Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average Shares Outstanding* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Per Share Items Net Earnings Attributable to Tootsie Roll Industries, Inc.* . . . . . . . . . . . . . . . . Cash Dividends Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $763,252 91,912 245,763 222,978 823,422 69,827 $681,440 75,937 218,894 212,043 783,171 70,868 $1.32 0.36 $1.07 0.36 *Adjusted for stock dividends. Printed on recycled paper. 31403 Tootsie Roll InsideCovers.indd 2 2/28/23 9:10 AM
Charms Organic Pops are made with organic, non-GMO ingredients and come in five tempting natural flavors and colors. The packaging is made in the USA with 35% post-consumer recycled materials and a portion of the sales proceeds are used to support educational programs. The trusted Charms name, enhanced with the attributes some consumers are looking for, has been well received by both mainstream retailers and specialty outlets that focus on natural foods. In support of our sales efforts and consistent with our ongoing commitment to connect with consumers, we strategically deploy our brand voice across a number of social media platforms. From the established realms of Facebook, X (formerly Twitter), Instagram, Pinterest, and YouTube to the dynamic landscape of TikTok, we traverse the digital universe to ensure that our message is widely heard. This multi-platform approach allows us to tailor our communication, ensuring a personalized touch that allows our brand stories to resonate across diverse age groups. To Our Shareholders Our social media strategy extends beyond presence to engagement. We actively cultivate relationships with our audience through a variety of immersive experiences. From captivating video content that takes them behind the scenes to enticing giveaways that spark excitement, and from sharing tasty recipes to fostering creativity with engaging challenges and crafts, every interaction is a building block in our digital community of both current and future shoppers. One of the key focal points in our social media strategy is the iconic Mr. Owl and the timeless question, How many licks does it take to get to the Tootsie Roll center of a Tootsie Pop? Though thousands of estimates have been postulated over the years, as of this moment the answer to this enduring riddle remains as elusive as ever, resonating not only in the physical universe but echoing intriguingly in the metaverse: The world may never know! Our efforts in the digital sphere are endemic of our commitment to building lasting connections with our audience, fostering brand loyalty, and creating a space where consumer feedback is welcomed. As we navigate the evolving digital landscape, our goal remains clear: to leave a lasting impression in the hearts and minds of our audience, one engaging post at a time. The record results posted by the Company in 2023 are the result of hard work and dedication by our many loyal employees. We wish to express our appreciation to them, along with our customers, suppliers, sales brokers and distributors throughout the world for their support in 2023. We also thank our fellow shareholders as we remain committed to the pursuit of excellence in the near term as well as in the years to come. Ellen R. Gordon Chairman of the Board and Chief Executive Officer Ellen R. Gordon, Chairman and Chief Executive Officer Net product sales in 2023 were a record $763 million, an increase of $82 million or 12% over net product sales of $681 million in 2022. Net earnings grew to $92.0 million from $75.9 million in the previous year, an increase of $16.1 million or 21%. Net earnings per share were $1.32 in 2023, up 23% from $1.07 in 2022. Earnings per share benefited from both higher earnings and from fewer shares outstanding due to ongoing share repurchases. The record sales achieved in 2023 were attributable to effective sales and marketing programs as well as to higher price realization. The company has implemented several price increases in recent years to offset higher costs in many input categories. These include ingredients, packaging materials, labor and benefits and plant operating costs such as supplies, services, utilities, repairs and maintenance. We believe that the cost increases in ingredients and packaging over the past two years are the largest we have experienced in decades. Accordingly we, like many consumer product companies, have found it necessary to increase prices in order to restore our margins. We have made progress in this regard but margins have not been fully restored to previous levels. We continue to monitor our input costs as well as pricing in the industry, mindful of the effects and limits on passing these higher costs on to our customers and ultimately to the consumers of our products. A key attribute of our venerable brands is their value orientation. In order to maintain that positioning we strive to mitigate costs and maximize efficiency where we can without jeopardizing the long-term strength of the Company and its brands. We deem it essential to be a low cost producer and actively pursue investments in the latest equipment and technology to keep us so. In this regard, capital expenditures were $27 million in 2023. 31840_Annual Report 2024.indd 1 2/22/24 2/26/24 10:35 AM
Some of the projects in 2023 were undertaken to meet the growing demand in certain product lines while other projects were directed toward upgrading plant infrastructure. Confectionery manufacturing in our highly automated plants is complex and food safety standards are rigorous. We are fortunate to have sufficient funds that enable us to maintain our manufacturing facilities in peak condition and meet or exceed the highest food safety standards. In addition to capital investments, we continue to seek innovative ways to keep our costs as low as possible. Competitive bidding, selective hedging and leveraging our high volume of ingredient and packaging purchases are some of the means we use to achieve this. We are also focused on controlling energy costs and were honored to receive an Energy Excellence award in recognition of our commitment to energy efficiency and participation in the local utility s Strategic Energy Management Program. Our supply chain improved significantly in 2023 as compared to 2022. Still, we remain focused on the supply chain in order to ensure that we avoid delays and disruptions which can result in temporary interruptions to our operations and result in lost sales and profits. Another area of improvement in 2023 was the availability of labor, which eased to some degree from 2022. This enabled us to expand our work shifts in order to increase production and inventory levels so as to meet sales demands on a timely basis. During 2023 we again paid cash dividends of 36 cents per share and distributed a 3% stock dividend. This was the eighty-first consecutive year the Company has paid cash dividends and the fifty-ninth consecutive year that a stock dividend was distributed. We also repurchased 927,500 shares of our common stock in the open market for an aggregate price of $33.1 million. Our capital expenditures, dividends and stock repurchases are all accomplished with internally generated funds. We ended 2023 with $332 million in cash and investments net of interest bearing debt and investments that hedge deferred compensation liabilities. With these financial resources, we are able to continue investing in our business, improving manufacturing productivity and quality, increasing capacity, supporting our brands, paying dividends and repurchasing common stock. We also continue to seek appropriate complementary business acquisitions. The focus of our business is to manufacture and sell a wide and appealing range of branded confectionery products suitable for virtually every major consumer group and retail format. The broad assortment of items in our diverse and highly recognizable portfolio is popular across all trade channels where candy is typically sold. During 2023, we again used targeted marketing initiatives, directed both to the trade and to consumers, to help move 31840_Annual Report 2024.indd 2 our products into distribution and subsequently to move them off the retail shelf. We find that these carefully executed and channel-specific promotions drive sales by emphasizing high sell-through and attractive profit margins to the trade and a high quality, appealing value to the consumer. We reinforce this value proposition in several important ways. Our bonus bag program offers big value, high margins, fast turns and, especially when combined with pallet shipper displays, increased retail lift a win for retailers and consumers alike. We also continued to expand our popular lay down bag offerings into the stand-up pouch format which presents consumers with an even better value, more suitable for larger families or sharing and give-away occasions such as social gatherings or office candy dishes. Our most recent addition in this pack size was in the Andes line, and it was well received in the market. Peg bags are a growing type of pack in convenience stores, grocery and mass merchandizers. During the year we capitalized on this trend by launching several new peg bags in the non-chocolate segment featuring our Dots, Fruit Chews, Cry Baby and Blow Pop brands. For added appeal, the Fruit Chew and Cry Baby items were presented in a sour flavor profile, while the Blow Pop item was a unique gumball filled with candy bits an inside out version of its popular namesake. The selling power of floor stand displays is well established. In this format we offer a range of items including theater boxes and bagged goods in a variety of sizes ranging from full pallets for high volume venues all the way down to a one-eighth size pallet for smaller retail stores that lack the floor space or sales volume to support a traditionally sized display. These displays normally feature attractive pricing for the consumer and increase sales velocity for the retailer. Halloween has long been our largest selling period, and sales in the third quarter exceed those of any other quarter in the year. Especially popular for the Halloween season are our large bags of Child s Play and other mixed candy assortments. These are offered in a variety of pack sizes and merchandising presentations including pallet packs, off-shelf displays and display ready cases. While Halloween is our most significant selling season, our products continue to grow in other candy seasons including Valentine s Day, Easter and Christmas. Here we offer our most popular everyday items dressed in creative seasonal graphics, plus an innovative assortment of season-specific treats. In 2023, some of the latter included Cupids Love Potion wax bottles for the amorous on Valentine s Day and dark, black-cherry flavored Lump of Coal Dots for those on Santa s naughty list. These whimsical variations on a theme are part of the fun and magic of the confectionery business. In 2023 we introduced Charms Organic Pops, our first offering in the fast growing better for you market segment. 2/22/24 10:35 AM
Some of the projects in 2023 were undertaken to meet the growing demand in certain product lines while other projects were directed toward upgrading plant infrastructure. Confectionery manufacturing in our highly automated plants is complex and food safety standards are rigorous. We are fortunate to have sufficient funds that enable us to maintain our manufacturing facilities in peak condition and meet or exceed the highest food safety standards. In addition to capital investments, we continue to seek innovative ways to keep our costs as low as possible. Competitive bidding, selective hedging and leveraging our high volume of ingredient and packaging purchases are some of the means we use to achieve this. We are also focused on controlling energy costs and were honored to receive an Energy Excellence award in recognition of our commitment to energy efficiency and participation in the local utility s Strategic Energy Management Program. Our supply chain improved significantly in 2023 as compared to 2022. Still, we remain focused on the supply chain in order to ensure that we avoid delays and disruptions which can result in temporary interruptions to our operations and result in lost sales and profits. Another area of improvement in 2023 was the availability of labor, which eased to some degree from 2022. This enabled us to expand our work shifts in order to increase production and inventory levels so as to meet sales demands on a timely basis. During 2023 we again paid cash dividends of 36 cents per share and distributed a 3% stock dividend. This was the eighty-first consecutive year the Company has paid cash dividends and the fifty-ninth consecutive year that a stock dividend was distributed. We also repurchased 927,500 shares of our common stock in the open market for an aggregate price of $33.1 million. Our capital expenditures, dividends and stock repurchases are all accomplished with internally generated funds. We ended 2023 with $332 million in cash and investments net of interest bearing debt and investments that hedge deferred compensation liabilities. With these financial resources, we are able to continue investing in our business, improving manufacturing productivity and quality, increasing capacity, supporting our brands, paying dividends and repurchasing common stock. We also continue to seek appropriate complementary business acquisitions. The focus of our business is to manufacture and sell a wide and appealing range of branded confectionery products suitable for virtually every major consumer group and retail format. The broad assortment of items in our diverse and highly recognizable portfolio is popular across all trade channels where candy is typically sold. During 2023, we again used targeted marketing initiatives, directed both to the trade and to consumers, to help move 31840_Annual Report 2024.indd 2 our products into distribution and subsequently to move them off the retail shelf. We find that these carefully executed and channel-specific promotions drive sales by emphasizing high sell-through and attractive profit margins to the trade and a high quality, appealing value to the consumer. We reinforce this value proposition in several important ways. Our bonus bag program offers big value, high margins, fast turns and, especially when combined with pallet shipper displays, increased retail lift a win for retailers and consumers alike. We also continued to expand our popular lay down bag offerings into the stand-up pouch format which presents consumers with an even better value, more suitable for larger families or sharing and give-away occasions such as social gatherings or office candy dishes. Our most recent addition in this pack size was in the Andes line, and it was well received in the market. Peg bags are a growing type of pack in convenience stores, grocery and mass merchandizers. During the year we capitalized on this trend by launching several new peg bags in the non-chocolate segment featuring our Dots, Fruit Chews, Cry Baby and Blow Pop brands. For added appeal, the Fruit Chew and Cry Baby items were presented in a sour flavor profile, while the Blow Pop item was a unique gumball filled with candy bits an inside out version of its popular namesake. The selling power of floor stand displays is well established. In this format we offer a range of items including theater boxes and bagged goods in a variety of sizes ranging from full pallets for high volume venues all the way down to a one-eighth size pallet for smaller retail stores that lack the floor space or sales volume to support a traditionally sized display. These displays normally feature attractive pricing for the consumer and increase sales velocity for the retailer. Halloween has long been our largest selling period, and sales in the third quarter exceed those of any other quarter in the year. Especially popular for the Halloween season are our large bags of Child s Play and other mixed candy assortments. These are offered in a variety of pack sizes and merchandising presentations including pallet packs, off-shelf displays and display ready cases. While Halloween is our most significant selling season, our products continue to grow in other candy seasons including Valentine s Day, Easter and Christmas. Here we offer our most popular everyday items dressed in creative seasonal graphics, plus an innovative assortment of season-specific treats. In 2023, some of the latter included Cupids Love Potion wax bottles for the amorous on Valentine s Day and dark, black-cherry flavored Lump of Coal Dots for those on Santa s naughty list. These whimsical variations on a theme are part of the fun and magic of the confectionery business. In 2023 we introduced Charms Organic Pops, our first offering in the fast growing better for you market segment. 2/22/24 10:35 AM
 • shareholder letter icon 3/25/2024 Letter Continued (Full PDF)
 • stockholder letter icon 4/13/2023 TR Stockholder Letter
 • stockholder letter icon 3/27/2025 TR Stockholder Letter
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TR 3/25/2024 Shareholder/Stockholder Letter Transcript:

CHKSUM
Content: No Content
Layout: 4010
Graphics: 13495
CLEAN
2023
30750 Tootsie Roll Covers.indd 1
3/4/21 2:19:02 PM

Corporate Profile
Tootsie Roll Industries, Inc. has been engaged in the
manufacture and sale of confectionery products for
over 125 years. Our products are primarily sold under
the familiar brand names: Tootsie Roll, Tootsie Roll Pops,
Caramel Apple Pops, Child   s Play, Charms, Blow Pop,
Blue Razz, Cella   s chocolate covered cherries, Dots,
Crows, Junior Mints, Junior Caramels, Charleston
Chew, Sugar Daddy, Sugar Babies, Andes, Fluffy Stuff
cotton candy, Dubble Bubble, Razzles, Cry Baby,
Nik-L-Nip and Tutsi (Mexico).
Corporate Principles
We believe that the differences among companies are
attributable to the caliber of their people, and therefore
we strive to attract and retain superior people for each
job.
We believe that an open, family atmosphere at work
combined with professional management fosters
cooperation and enables each individual to maximize
his or her contribution to the Company and realize the
corresponding rewards.
We do not jeopardize long-term growth for immediate,
short-term results.
We maintain a conservative financial posture in the
deployment and management of our assets.
We invest in the latest and most productive equipment
to deliver the best quality product to our customers at
the lowest cost.
We seek to outsource functions where appropriate and
to vertically integrate operations where it is financially
advantageous to do so.
We view our well known brands as prized assets to be
aggressively advertised and promoted to each new
generation of consumers.
We conduct business with the highest ethical
standards and integrity which are codified in the
Company   s    Code of Business Conduct and Ethics.   
We run a trim operation and continually strive to
eliminate waste, minimize cost and implement
performance improvements.
Financial Highlights
2023
December 31,
Board of Directors
Offices, Plants
Ellen R. Gordon
Executive Offices
7401 South Cicero Avenue
Chicago, Illinois 60629
www.tootsie.com
Plants/Warehouses
Illinois
Tennessee
Massachusetts
Wisconsin
Ontario, Canada
Mexico City, Mexico
Barcelona, Spain
Foreign Sales Offices
Mexico City, Mexico
Ontario, Canada
Chairman of the Board and
Chief Executive Officer
Private Investor
Virginia L. Gordon
Lana Jane Lewis-Brent(1)(2)
President, Paul Brent
Designer, Inc., an art
publishing, design and
licensing company
Barre A. Seibert(1)(2)
Retired First Vice President,
Washington Mutual Bank
Paula M. Wardynski(1)(2)
Former Senior Vice
President   Finance,
Twenty-First Century Fox
Audit Committee
(1)
Barcelona, Spain
Compensation Committee
(2)
Other Information
Officers
Ellen R. Gordon
Chairman of the Board and
Chief Executive Officer
G. Howard Ember, Jr.
Vice President, Finance &
Chief Financial Officer
Stephen P. Green
Vice President, Manufacturing
Kenneth D. Naylor
Vice President,
Marketing & Sales
Henry G. Mills
Vice President, Business
Development
Barry P. Bowen
Treasurer & Assistant
Secretary
Robert L. Zirk
Controller
Stock Exchange
New York Stock
Exchange, Inc.
(Since 1922)
Stock Identification
Ticker Symbol: TR
CUSIP No. 890516 10-7
Stock Transfer Agent and
Stock Registrar
Equiniti Trust Company,
LLC (   EQ   )
48 Wall Street, Floor 23
New York, NY 10005
1-800-710-0932
https://equiniti.com/us/
ast-access
Independent Registered
Public Accounting Firm
Grant Thornton LLP
171 North Clark Street,
Suite 200
Chicago, Illinois 60601
General Counsel
Aronberg Goldgehn Davis &
Garmisa
225 West Washington Street,
Suite 2800
Chicago, Illinois 60606
Annual Meeting
May 6, 2024
One James Center, Suite 200
901 East Cary Street
Richmond, Virginia 23219
2022
(in thousands except per share data)
Net Product Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Earnings Attributable to Tootsie Roll Industries, Inc. . . . . . . . . . . . . . . . . .
Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders    Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average Shares Outstanding* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Per Share Items
Net Earnings Attributable to Tootsie Roll Industries, Inc.* . . . . . . . . . . . . . . . .
Cash Dividends Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$763,252
91,912
245,763
222,978
823,422
69,827
$681,440
75,937
218,894
212,043
783,171
70,868
$1.32
0.36
$1.07
0.36
*Adjusted for stock dividends.
Printed on recycled paper.
31403 Tootsie Roll InsideCovers.indd 2
2/28/23 9:10 AM

Charms Organic Pops are made with organic, non-GMO ingredients and come in
five tempting natural flavors and colors. The packaging is made in the USA with
35% post-consumer recycled materials and a portion of the sales proceeds are
used to support educational programs. The trusted Charms name, enhanced with
the attributes some consumers are looking for, has been well received by both
mainstream retailers and specialty outlets that focus on natural foods.
In support of our sales efforts and consistent with our ongoing commitment to
connect with consumers, we strategically deploy our brand voice across a number
of social media platforms. From the established realms of Facebook, X (formerly
Twitter), Instagram, Pinterest, and YouTube to the dynamic landscape of TikTok,
we traverse the digital universe to ensure that our message is widely heard. This
multi-platform approach allows us to tailor our communication, ensuring a personalized touch that allows our brand stories to resonate across diverse age groups.
To Our
Shareholders
Our social media strategy extends beyond presence to engagement. We actively
cultivate relationships with our audience through a variety of immersive experiences. From captivating video content that takes them    behind the scenes    to enticing giveaways that spark excitement, and from sharing tasty recipes to fostering
creativity with engaging challenges and crafts, every interaction is a building block
in our digital community of both current and future shoppers.
One of the key focal points in our social media strategy is the iconic Mr. Owl and
the timeless question,    How many licks does it take to get to the Tootsie Roll center
of a Tootsie Pop?    Though thousands of estimates have been postulated over the
years, as of this moment the answer to this enduring riddle remains as elusive as
ever, resonating not only in the physical universe but echoing intriguingly in the
metaverse:    The world may never know!   
Our efforts in the digital sphere are endemic of our commitment to building lasting
connections with our audience, fostering brand loyalty, and creating a space where
consumer feedback is welcomed. As we navigate the evolving digital landscape,
our goal remains clear: to leave a lasting impression in the hearts and minds of our
audience, one engaging post at a time.
The record results posted by the Company in 2023 are the result of hard work and
dedication by our many loyal employees. We wish to express our appreciation to
them, along with our customers, suppliers, sales brokers and distributors throughout the world for their support in 2023. We also thank our fellow shareholders as
we remain committed to the pursuit of excellence in the near term as well as in the
years to come.
Ellen R. Gordon
Chairman of the Board and
Chief Executive Officer
Ellen R. Gordon, Chairman and Chief Executive Officer
Net product sales in 2023 were a record $763 million, an increase of $82 million
or 12% over net product sales of $681 million in 2022. Net earnings grew to $92.0
million from $75.9 million in the previous year, an increase of $16.1 million or 21%.
Net earnings per share were $1.32 in 2023, up 23% from $1.07 in 2022. Earnings
per share benefited from both higher earnings and from fewer shares outstanding
due to ongoing share repurchases.
The record sales achieved in 2023 were attributable to effective sales and marketing programs as well as to higher price realization. The company has implemented
several price increases in recent years to offset higher costs in many input categories. These include ingredients, packaging materials, labor and benefits and plant
operating costs such as supplies, services, utilities, repairs and maintenance.
We believe that the cost increases in ingredients and packaging over the past two
years are the largest we have experienced in decades. Accordingly we, like many
consumer product companies, have found it necessary to increase prices in order
to restore our margins. We have made progress in this regard but margins have
not been fully restored to previous levels. We continue to monitor our input costs
as well as pricing in the industry, mindful of the effects and limits on passing these
higher costs on to our customers and ultimately to the consumers of our products.
A key attribute of our venerable brands is their value orientation. In order to maintain that positioning we strive to mitigate costs and maximize efficiency where we
can without jeopardizing the long-term strength of the Company and its brands. We
deem it essential to be a low cost producer and actively pursue investments in the
latest equipment and technology to keep us so. In this regard, capital expenditures
were $27 million in 2023.
31840_Annual Report 2024.indd 1
2/22/24
2/26/24 10:35 AM

Some of the projects in 2023 were undertaken to meet the
growing demand in certain product lines while other projects were directed toward upgrading plant infrastructure.
Confectionery manufacturing in our highly automated plants
is complex and food safety standards are rigorous. We are
fortunate to have sufficient funds that enable us to maintain
our manufacturing facilities in peak condition and meet or
exceed the highest food safety standards.
In addition to capital investments, we continue to seek innovative ways to keep our costs as low as possible. Competitive bidding, selective hedging and leveraging our high
volume of ingredient and packaging purchases are some
of the means we use to achieve this. We are also focused
on controlling energy costs and were honored to receive an
   Energy Excellence    award in recognition of our commitment
to energy efficiency and participation in the local utility   s
Strategic Energy Management Program.
Our supply chain improved significantly in 2023 as compared to 2022. Still, we remain focused on the supply chain
in order to ensure that we avoid delays and disruptions
which can result in temporary interruptions to our operations
and result in lost sales and profits. Another area of improvement in 2023 was the availability of labor, which eased to
some degree from 2022. This enabled us to expand our
work shifts in order to increase production and inventory
levels so as to meet sales demands on a timely basis.
During 2023 we again paid cash dividends of 36 cents per
share and distributed a 3% stock dividend. This was the
eighty-first consecutive year the Company has paid cash
dividends and the fifty-ninth consecutive year that a stock
dividend was distributed. We also repurchased 927,500
shares of our common stock in the open market for an aggregate price of $33.1 million.
Our capital expenditures, dividends and stock repurchases
are all accomplished with internally generated funds. We
ended 2023 with $332 million in cash and investments net of
interest bearing debt and investments that hedge deferred
compensation liabilities. With these financial resources, we
are able to continue investing in our business, improving
manufacturing productivity and quality, increasing capacity,
supporting our brands, paying dividends and repurchasing
common stock. We also continue to seek appropriate complementary business acquisitions.
The focus of our business is to manufacture and sell a wide
and appealing range of branded confectionery products
suitable for virtually every major consumer group and retail
format. The broad assortment of items in our diverse and
highly recognizable portfolio is popular across all trade channels where candy is typically sold.
During 2023, we again used targeted marketing initiatives,
directed both to the trade and to consumers, to help move
31840_Annual Report 2024.indd 2
our products into distribution and subsequently to move
them off the retail shelf. We find that these carefully executed and channel-specific promotions drive sales by emphasizing high sell-through and attractive profit margins to the
trade and a high quality, appealing value to the consumer.
We reinforce this value proposition in several important
ways. Our bonus bag program offers big value, high margins, fast turns and, especially when combined with pallet
shipper displays, increased retail lift   a win for retailers and
consumers alike. We also continued to expand our popular
lay down bag offerings into the stand-up pouch format which
presents consumers with an even better value, more suitable for larger families or sharing and give-away occasions
such as social gatherings or office candy dishes. Our most
recent addition in this pack size was in the Andes line, and it
was well received in the market.
Peg bags are a growing type of pack in convenience stores,
grocery and mass merchandizers. During the year we capitalized on this trend by launching several new peg bags in
the non-chocolate segment featuring our Dots, Fruit Chews,
Cry Baby and Blow Pop brands. For added appeal, the
Fruit Chew and Cry Baby items were presented in a sour
flavor profile, while the Blow Pop item was a unique gumball
filled with candy bits   an    inside out    version of its popular
namesake.
The selling power of floor stand displays is well established.
In this format we offer a range of items including theater
boxes and bagged goods in a variety of sizes ranging from
full pallets for high volume venues all the way down to a
one-eighth size pallet for smaller retail stores that lack the
floor space or sales volume to support a traditionally sized
display. These displays normally feature attractive pricing for
the consumer and increase sales velocity for the retailer.
Halloween has long been our largest selling period, and
sales in the third quarter exceed those of any other quarter
in the year. Especially popular for the Halloween season are
our large bags of Child   s Play and other mixed candy assortments. These are offered in a variety of pack sizes and
merchandising presentations including pallet packs, off-shelf
displays and display ready cases.
While Halloween is our most significant selling season, our
products continue to grow in other candy seasons including
Valentine   s Day, Easter and Christmas. Here we offer our
most popular everyday items dressed in creative seasonal
graphics, plus an innovative assortment of season-specific
treats. In 2023, some of the latter included    Cupids Love
Potion    wax bottles for the amorous on Valentine   s Day and
dark, black-cherry flavored    Lump of Coal    Dots for those on
Santa   s naughty list. These whimsical variations on a theme
are part of the fun and magic of the confectionery business.
In 2023 we introduced Charms Organic Pops, our first
offering in the fast growing    better for you    market segment.
2/22/24 10:35 AM

Some of the projects in 2023 were undertaken to meet the
growing demand in certain product lines while other projects were directed toward upgrading plant infrastructure.
Confectionery manufacturing in our highly automated plants
is complex and food safety standards are rigorous. We are
fortunate to have sufficient funds that enable us to maintain
our manufacturing facilities in peak condition and meet or
exceed the highest food safety standards.
In addition to capital investments, we continue to seek innovative ways to keep our costs as low as possible. Competitive bidding, selective hedging and leveraging our high
volume of ingredient and packaging purchases are some
of the means we use to achieve this. We are also focused
on controlling energy costs and were honored to receive an
   Energy Excellence    award in recognition of our commitment
to energy efficiency and participation in the local utility   s
Strategic Energy Management Program.
Our supply chain improved significantly in 2023 as compared to 2022. Still, we remain focused on the supply chain
in order to ensure that we avoid delays and disruptions
which can result in temporary interruptions to our operations
and result in lost sales and profits. Another area of improvement in 2023 was the availability of labor, which eased to
some degree from 2022. This enabled us to expand our
work shifts in order to increase production and inventory
levels so as to meet sales demands on a timely basis.
During 2023 we again paid cash dividends of 36 cents per
share and distributed a 3% stock dividend. This was the
eighty-first consecutive year the Company has paid cash
dividends and the fifty-ninth consecutive year that a stock
dividend was distributed. We also repurchased 927,500
shares of our common stock in the open market for an aggregate price of $33.1 million.
Our capital expenditures, dividends and stock repurchases
are all accomplished with internally generated funds. We
ended 2023 with $332 million in cash and investments net of
interest bearing debt and investments that hedge deferred
compensation liabilities. With these financial resources, we
are able to continue investing in our business, improving
manufacturing productivity and quality, increasing capacity,
supporting our brands, paying dividends and repurchasing
common stock. We also continue to seek appropriate complementary business acquisitions.
The focus of our business is to manufacture and sell a wide
and appealing range of branded confectionery products
suitable for virtually every major consumer group and retail
format. The broad assortment of items in our diverse and
highly recognizable portfolio is popular across all trade channels where candy is typically sold.
During 2023, we again used targeted marketing initiatives,
directed both to the trade and to consumers, to help move
31840_Annual Report 2024.indd 2
our products into distribution and subsequently to move
them off the retail shelf. We find that these carefully executed and channel-specific promotions drive sales by emphasizing high sell-through and attractive profit margins to the
trade and a high quality, appealing value to the consumer.
We reinforce this value proposition in several important
ways. Our bonus bag program offers big value, high margins, fast turns and, especially when combined with pallet
shipper displays, increased retail lift   a win for retailers and
consumers alike. We also continued to expand our popular
lay down bag offerings into the stand-up pouch format which
presents consumers with an even better value, more suitable for larger families or sharing and give-away occasions
such as social gatherings or office candy dishes. Our most
recent addition in this pack size was in the Andes line, and it
was well received in the market.
Peg bags are a growing type of pack in convenience stores,
grocery and mass merchandizers. During the year we capitalized on this trend by launching several new peg bags in
the non-chocolate segment featuring our Dots, Fruit Chews,
Cry Baby and Blow Pop brands. For added appeal, the
Fruit Chew and Cry Baby items were presented in a sour
flavor profile, while the Blow Pop item was a unique gumball
filled with candy bits   an    inside out    version of its popular
namesake.
The selling power of floor stand displays is well established.
In this format we offer a range of items including theater
boxes and bagged goods in a variety of sizes ranging from
full pallets for high volume venues all the way down to a
one-eighth size pallet for smaller retail stores that lack the
floor space or sales volume to support a traditionally sized
display. These displays normally feature attractive pricing for
the consumer and increase sales velocity for the retailer.
Halloween has long been our largest selling period, and
sales in the third quarter exceed those of any other quarter
in the year. Especially popular for the Halloween season are
our large bags of Child   s Play and other mixed candy assortments. These are offered in a variety of pack sizes and
merchandising presentations including pallet packs, off-shelf
displays and display ready cases.
While Halloween is our most significant selling season, our
products continue to grow in other candy seasons including
Valentine   s Day, Easter and Christmas. Here we offer our
most popular everyday items dressed in creative seasonal
graphics, plus an innovative assortment of season-specific
treats. In 2023, some of the latter included    Cupids Love
Potion    wax bottles for the amorous on Valentine   s Day and
dark, black-cherry flavored    Lump of Coal    Dots for those on
Santa   s naughty list. These whimsical variations on a theme
are part of the fun and magic of the confectionery business.
In 2023 we introduced Charms Organic Pops, our first
offering in the fast growing    better for you    market segment.
2/22/24 10:35 AM


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