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What changed in TOOTSIE ROLL INDUSTRIES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of TOOTSIE ROLL INDUSTRIES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+161 added−145 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in TOOTSIE ROLL INDUSTRIES INC's 2025 10-K

161 paragraphs added · 145 removed · 131 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

14 edited+2 added−2 removed13 unchanged
Biggest changeOur business has seasonality which results in bringing on some additional employees to meet seasonal production demands principally in advance of the Halloween selling season. The Company experiences a relatively consistent sales level throughout the year except for an increase in the third quarter which reflects pre-Halloween and back-to-school sales.
Biggest changeThe Company experiences a relatively consistent sales level throughout the year except for an increase in the third quarter which reflects pre-Halloween and back-to-school sales. In anticipation of this seasonal sales period, the Company generally begins building inventories, and its seasonal workforce, in the second and third quarter of each year.
The majority of the Company’s products are sold under the registered trademarks TOOTSIE ROLL, TOOTSIE FRUIT ROLLS, FROOTIES, TOOTSIE POPS, TOOTSIE MINI POPS, CHILD’S PLAY, CARAMEL APPLE POPS, CHARMS, BLOW-POP, CHARMS MINI POPS, CELLA’S, DOTS, JUNIOR MINTS, CHARLESTON CHEW, SUGAR DADDY, SUGAR BABIES, ANDES, FLUFFY STUFF, DUBBLE BUBBLE, RAZZLES, CRY BABY, NIK-L-NIP, and TUTSI POP (Mexico). ​ The Company’s products are marketed in a variety of packages designed to be suitable for display and sale in different types of retail outlets.
The majority of the Company’s products are sold under the registered trademarks TOOTSIE ROLL, TOOTSIE FRUIT ROLL, TOOTSIE POPS, TOOTSIE MINI POPS, CHILD’S PLAY, CARAMEL APPLE POPS, CHARMS, BLOW-POP, CHARMS MINI POPS, CELLA’S, DOTS, JUNIOR MINTS, CHARLESTON CHEW, SUGAR DADDY, SUGAR BABIES, ANDES, FLUFFY STUFF, DUBBLE BUBBLE, RAZZLES, CRY BABY, NIK-L-NIP, and TUTSI POP (Mexico). ​ The Company’s products are marketed in a variety of packages designed to be suitable for display and sale in different types of retail outlets.
Continued trademark protection is of material importance to the Company’s business as a whole. ​ Although the Company does research and develops new products and product line extensions for existing brands, it also improves the quality of existing products, improves and modernizes production processes, and develops and implements new technologies.
Continued trademark protection is of material importance to the Company’s business as a whole. ​ Although the Company does research and develops new products and product line extensions for existing brands, it also improves the quality of existing products, improves and modernizes production processes, and develops and implements new technologies to improve quality and efficiencies.
ITEM 1. Busines s . ​ Tootsie Roll Industries, Inc. and its consolidated subsidiaries (the “Company”) have been engaged in the manufacture and sale of confectionery products for over 100 years. This is the only industry segment in which the Company operates and is its only line of business.
ITEM 1. Busines s . ​ Tootsie Roll Industries, Inc. and its consolidated subsidiaries (the “Company”) have been engaged in the manufacture and sale of confectionery products for over 125 years. This is the only industry segment in which the Company operates and is its only line of business.
These customers include wholesale distributors of candy, food and groceries, supermarkets, variety stores, dollar stores, chain grocers, drug chains, discount chains, cooperative grocery associations, mass merchandisers, warehouse and membership club stores, vending machine operators, e-commerce merchants, the U.S. military and fund-raising charitable organizations. ​ The Company’s principal markets are in the United States, Canada and Mexico.
These customers include wholesale distributors of candy, food and groceries, supermarkets, variety stores, dollar stores, chain grocers, drug chains, discount chains, cooperative grocery associations, mass merchandisers, warehouse and membership club stores, vending machine operators, e-commerce merchants, on-line marketplaces, the U.S. military and fund-raising charitable organizations. ​ The Company’s principal markets are in the United States, Canada and Mexico.
In the markets in which the Company competes, the main forms of competition comprise brand recognition, as well as competition for retail shelf space and a fair price for the Company’s products at various retail price points. ​ The Company’s backlog of orders as of December 31, 2024 was approximately $10 million and is generally consistent with the prior year. ​ The Company has historically hedged certain of its future sugar needs with derivatives at such times that it believes that the forward markets are favorable.
In the markets in which the Company competes, the main forms of competition comprise brand recognition, as well as competition for retail shelf space and a fair price for the Company’s products at various retail price points. ​ The Company’s backlog of orders as of December 31, 2025 was approximately $7 million and is generally consistent with the prior year. ​ The Company has historically hedged certain of its future sugar needs with derivatives at such times that it believes that the forward markets are favorable.
(“Dollar Tree”, which includes net sales from Family Dollar which is owned by Dollar Tree) 4 Table of Contents aggregated approximately 12.6%, 14.2%, and 12.4% of net product sales during the years ended December 31, 2024, 2023 and 2022, respectively.
(“Dollar Tree”, which includes net sales from Family Dollar which is owned by Dollar Tree) 4 Table of Contents aggregated approximately 13.1%, 12.6%, and 14.2% of net product sales during the years ended December 31, 2025, 2024 and 2023, respectively.
The Company maintains quality assurance, food safety and other programs to help ensure that all products the Company manufactures and distributes are safe, of high quality, and comply with all applicable laws and regulations. ​ The Company’s compliance with federal, state and local regulations which have been enacted to regulate the protection of the environment, has not had a material effect on the capital expenditures, earnings or competitive position of the Company nor does the Company anticipate any such material effects from presently enacted or adopted regulations. ​ The Company employs approximately 2,300 full-time persons at all locations.
The Company maintains quality assurance, food safety and other programs to help ensure that all products the Company manufactures and distributes are safe, of high quality, and comply with all applicable laws and regulations. ​ The Company’s compliance with federal, state and local regulations which have been enacted to regulate the protection of the environment, has not had a material effect on the capital expenditures, earnings or competitive position of the Company nor does the Company anticipate any such material effects from presently enacted or adopted regulations.
The Company will generally purchase forward derivative contracts (i.e., “long” position) in selected future months that correspond to the Company’s estimated procurement and usage needs of the respective commodity in the respective forward periods. ​ Based on increases in its input costs, the Company plans to increase its sales prices to recover higher input costs, primarily ingredients, packaging materials, labor and benefits, manufacturing maintenance, supplies and services, and freight and delivery.
The Company will generally purchase forward derivative contracts (i.e., “long” position) in selected future months that correspond to the Company’s estimated procurement and usage needs of the respective commodity in the respective forward periods. ​ The Company has historically increased its sales prices to recover higher input costs, primarily ingredients, packaging materials, labor and benefits, manufacturing maintenance, supplies and services, and freight and delivery.
Net product sales revenues from McLane, which includes these Wal-Mart and Dollar Tree sales as well as sales and deliveries to other Company customers, were 20.7% in 2024 and 20.1% in 2023 and 20.4% in 2022. At December 31, 2024 and 2023, the Company’s three largest customers discussed above accounted for approximately 41.9% and 39.6% of total accounts receivable, respectively.
Net product sales revenues from McLane, which includes these Wal-Mart and Dollar Tree sales as well as sales and deliveries to other Company customers, were 19.7% in 2025 and 20.7% in 2024 and 20.1% in 2023. At December 31, 2025 and 2024, the Company’s three largest customers discussed above accounted for approximately 37.8% and 41.9% of total accounts receivable, respectively.
A copy of our Code of Conduct can be found on our website, www.tootsie.com. ​ Our net product sales from Wal-Mart Stores, Inc. (“Wal-Mart”) aggregated approximately 23.2%, 22.2%, and 23.0% of net product sales during the years ended December 31, 2024, 2023 and 2022, respectively. Our net sales from Dollar Tree, Inc.
(“Wal-Mart”) aggregated approximately 22.0%, 23.2%, and 22.2% of net product sales during the years ended December 31, 2025, 2024 and 2023, respectively. Our net sales from Dollar Tree, Inc.
The Company concluded negotiations with its labor union at its Canadian plant in first quarter 2024 and is now operating under a contract with the labor union in Canada that expires in January 2029. ​ We believe our employees are among our most important resources and are critical to our continued success.
The Company’s union labor agreement at its Canadian plant was executed the first quarter of 2024 and expires in January 2029. ​ We believe our employees are among our most important resources and are critical to our continued success. We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations.
We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations. We pay our employees competitively and offer a broad range of company-paid benefits, which we believe are competitive with others in our industry.
We pay our employees competitively and offer a broad range of company-paid benefits, which we believe are competitive with others in our industry. Our management teams and all of our employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace.
In anticipation of this seasonal sales period, the Company generally begins building inventories, and its seasonal workforce, in the second and third quarter of each year. Although Halloween is the most significant season in sales and related production, other seasons, including Christmas, Valentines, and Easter also have some impact on workforce levels.
Although Halloween is the most significant season in sales and related production, other seasons, including Christmas, Valentines, and Easter also have some impact on workforce levels. The Company’s union labor agreement at its Chicago plant was negotiated and executed in 2023 and expires in September 2027.
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The Company’s union labor agreement at its Chicago plant was negotiated and executed in 2023 and expires in September 2027.
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See also Risk Factors in Section 1-A regarding certain risks that relate to our regulatory environment. ​ The Company employs approximately 2,100 full-time persons at all locations. Our business has seasonality which results in bringing on some additional employees to meet seasonal production demands principally in advance of the Halloween selling season.
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Our management teams and all of our employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. All of our employees must adhere to a Code of Conduct that sets standards for appropriate behavior.
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All of our employees must adhere to a Code of Conduct that sets standards for appropriate behavior. A copy of our Code of Conduct can be found on our website, www.tootsie.com. ​ Our net product sales from Wal-Mart Stores, Inc.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeVolatility in food and energy costs, rising unemployment and/or underemployment, declines in personal spending, recessionary economic conditions or other adverse market conditions, could adversely impact the Company’s revenues, profitability and financial condition. ​ ● Risks related to environmental matters - The Company’s operations are not particularly impactful on the environment, but increased government environmental regulation or legislation could adversely impact the Company’s profitability. ​ ● Risk of new governmental laws and regulations - Governmental laws and regulations, including those that affect food advertising and marketing to children, use of certain ingredients in products, new labeling requirements, income and other taxes, tariffs on U.S. imports and retaliatory tariffs in response, including the effects of changes to international trade agreements, new taxes targeted toward confectionery products and the environment, both in and outside the U.S.A., are subject to change over time, which could adversely impact the Company’s results of operations and ability to compete in domestic or foreign marketplaces. ​ ● Risk of labor stoppages - To the extent the Company experiences any significant labor stoppages and disputes, labor organizing efforts, strikes or possible labor shortages, could negatively affect overall operations including production or shipments of finished product to customers. ​ ● Risk of the cost of energy increasing and overall inflation - Higher energy costs as well as overall inflation would likely result in higher plant overhead, distribution, freight and delivery, and other operating costs.
Biggest changeVolatility in food and energy costs, rising unemployment and/or underemployment, declines in personal spending, recessionary economic conditions or other adverse market conditions, could adversely impact the Company’s revenues, profitability and financial condition. ​ ● Risks related to environmental matters - Increased government environmental regulation, including packaging and recycling mandates, or legislation, including at the state and local level, could adversely impact the Company’s profitability. ​ ● Risk of new governmental laws and regulations - Governmental laws and regulations, including those that affect food advertising and marketing to children, use of certain ingredients in products, new labeling requirements, income and other taxes, tariffs on U.S. imports and retaliatory tariffs in response, including the effects of changes to international trade agreements, new taxes targeted toward confectionery products and the environment, both in and outside the U.S.A., are subject to change over time, which could adversely impact the Company’s results of operations and ability to compete in domestic or foreign marketplaces. ​ ● Risk of continued developments in food industry legislation and regulatory requirements at the federal and state level - With recent leadership changes at the U.S.
Although the Company believes that these claims and other product labeling claims are without merit and has generally been successful in litigation and court decrees, the Company could be exposed to significant legal fees to defend its position, and in the event that it is not successful, could be subject to fines and costs of settlement, including class action settlements. ​ ● Risk related to international operations - To the extent there are political leadership or legislative changes, social and/or political unrest, civil war, pandemics such as the Covid-19, terrorism, significant economic or social instability, or the imposition of retaliatory tariffs in the countries in which the Company operates, the results of the Company’s business in such countries could be adversely impacted.
Although the Company believes that these claims and other product labeling claims are without merit and has generally been successful in litigation settlement and court decrees, the Company could be exposed to significant legal fees to defend its position, and in the event that it is not successful, could be subject to fines and costs of settlement, including class action settlements. ​ ● Risk related to international operations - To the extent there are political leadership or legislative changes, social and/or political unrest, civil war, pandemics such as the Covid-19, terrorism, significant economic or social instability, or the imposition of retaliatory tariffs in the countries in which the Company operates, the results of the Company’s business in such countries could be adversely impacted.
The Company is currently unable to determine the ultimate outcome of this 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 in one or more future periods. ​ ● Risk of impairment of goodwill or indefinite-lived intangible assets - In accordance with authoritative guidance, goodwill and indefinite-lived intangible assets are not amortized but are subject to an impairment evaluation annually or more frequently upon the occurrence of a triggering event.
The Company is currently unable to determine the ultimate outcome of this 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 in one or more future periods. ​ ● Risk of impairment of goodwill or indefinite-lived intangible assets, including trademarks - In accordance with authoritative guidance, goodwill and indefinite-lived intangible assets are not amortized but are subject to an impairment evaluation annually or more frequently upon the occurrence of a triggering event.
Moreover, in combination with adverse consumer sentiment regarding price increases, the Company may not be able to pass these cost increases to customers in the form of higher price; as a result, the imposition of tariffs may have an adverse impact on our profitability. ​ ● Risk of union labor stoppages, slowdowns or strikes - Significant labor stoppages, strikes or possible labor shortages could negatively affect overall operations including production or shipments of finished product to customers which could have material effects on the Company’s sales and profits. ​ ● The Company is a controlled company due to the common stock holdings of the Gordon family - The Gordon family’s share ownership represents a majority of the combined voting power of all classes of the Company’s common stock as of December 31, 2024.
Moreover, in combination with adverse consumer sentiment regarding price increases, the Company may not be able to pass these tariff cost increases to customers in the form of higher price; as a result, the imposition of tariffs may have an adverse impact on our profitability. ​ 9 Table of Contents ● Risk of union labor stoppages, slowdowns or strikes – Significant labor stoppages, strikes or possible labor shortages could negatively affect overall operations including production or shipments of finished product to customers which could have material effects on the Company’s sales and profits. ​ ● The Company is a controlled company due to the common stock holdings of the Gordon family - The Gordon family’s (including family members) share ownership represents a majority of the combined voting power of all classes of the Company’s common stock as of December 31, 2025.
These acquisitions generally come at a high multiple of earnings and are justified based on various assumptions related to sales growth, and operating margins. Were the Company to make another acquisition and be unable to achieve the assumed sales and operating margins, it could have an adverse impact on future sales and profits.
These acquisitions generally come at a high multiple of earnings and are justified based on various assumptions related to sales growth, cost and expense synergies, and resulting operating margins. Were the Company to make another acquisition and be unable to achieve the assumed sales, synergies and operating margins, it could have an adverse impact on future sales and profits.
See also Management’s Discussion and Analysis of Financial Condition and Results of Operations. ​ ● Risk of dependence on large customers - The Company’s largest customers, McLane, Wal-Mart and Dollar Tree, accounted for approximately 37% of net product sales in 2024, and other large national chains are also material to the Company’s sales.
See also Management’s Discussion and Analysis of Financial Condition and Results of Operations. ​ ● Risk of dependence on large customers - The Company’s largest customers, McLane, Wal-Mart and Dollar Tree, accounted for approximately 36% of net product sales in 2025, and other large national chains are also material to the Company’s sales.
Actions taken by major customers and competitors may make shelf space less available for the confectionery product category or some of the Company’s products. ​ ● Risk of pricing actions - Inherent risks in the marketplace, including uncertainties about trade and consumer acceptance of pricing actions, including related trade discounts or product weight changes (indirect price increases), could make it more difficult for the Company to maintain its sales and operating margins.
Action taken by major customers and competitors may make shelf space less available for the confectionary product category or some of the Company’s products. ​ ● Risk of pricing actions - Inherent risks in the marketplace, including uncertainties about trade and consumer acceptance of pricing actions, including related trade discounts or product weight changes (indirect price 5 Table of Contents increases), could make it more difficult for the Company to maintain its sales and operating margins.
Costs associated with a product recall and related litigation or fines, and marketing costs relating to the re-launch of such products or brands, could negatively 6 Table of Contents affect operating results.
Costs associated with a product recall and related litigation or fines, and marketing costs relating to the re-launch of such products or brands, could negatively affect operating results.
Increased focus on climate change has led to legislative and regulatory efforts to combat both potential causes and adverse impacts of climate change, including regulation of greenhouse gas (GHG) emissions.
Increased focus on climate change has led to legislative and regulatory efforts to combat both potential causes and adverse impacts of climate change, including regulation of greenhouse 7 Table of Contents gas (GHG) emissions.
In addition, negative publicity associated with this type of event, including a product recall relating to product contamination or product tampering, whether valid or not, could negatively impact future demand for the specific products subject to the recall as well as present reputational risk that could negatively impact the Company and demand more broadly for its brands. ​ ● Risk of operational interruptions relating to computer software or hardware failures, including cyber-attacks - The Company is reliant on computer systems to operate its business and supply chain.
In addition, negative publicity associated with this type of event, including a product recall relating to product contamination or product tampering, whether valid or not, could negatively impact future demand for the specific products subject to the recall as well as present reputational risk that could negatively impact the Company and demand more broadly for its brands. ​ ● Risk of operational interruptions relating to computer software or hardware failures, including periodic ERP software upgrades and patches on business software that is important to our business operations and cyber-attacks - The Company is reliant on computer systems and certain business software to operate its business and supply chain.
In addition, it could become necessary to record an impairment which would have a further adverse impact on reported profits. 8 Table of Contents ​ ● Risk of “slack fill” or other product label litigation - The Company, as well as other confectionery and food companies, have experienced a number of plaintiff claims that certain products are sold in boxes that are not completely full, and therefore such “slack filled” products are misleading, and even deceptive, to the consumer.
In addition, it could become necessary to record an impairment of related long-lived assets, which would have a further adverse impact on reported profits. ​ ● Risk of “slack fill” or other product labeling litigation - The Company, as well as other confectionery and food companies, have experienced a number of plaintiff claims that certain products are sold in boxes that are not completely full, and therefore such “slack filled” products are misleading, and even deceptive, to the consumer.
In addition, from time to time, the Company upgrades or replaces this specialized equipment. In many cases these are integrated and complex installations.
In addition, from time to time, the Company upgrades or replaces this 8 Table of Contents specialized equipment. In many cases these are integrated and complex installations.
The imposition of tariffs on goods and services imported from Canada to the US may have a material impact on our input costs.
Although the Company’s North American operations fall under the USMCA trade agreement, the imposition of tariffs or other surcharges on goods and services imported from Canada to the US may have a material impact on our input costs.
New legislation or an enforcement action in this area could harm our reputation and financial results. ​ ​ 7 Table of Contents Risk factors which we believe are principally specific to our Company (although some may apply to varying degrees to competitors in our industry) ​ ● Risks relating to participation in the multi-employer pension plan for certain Company union employees - As outlined in the Note 7 of the Company’s Notes to Consolidated Financial Statements and discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Company participates in a multi-employer union pension plan (Plan) which is currently in “critical and declining status”, as defined by applicable law.
Imposing tariffs on goods we either import directly or purchase from suppliers who import certain materials would have a negative impact on our business as many of the inputs we need are only available from certain areas of the world outside of the United States. ​ ​ Risk factors which we believe are principally specific to our Company (although some may apply to varying degrees to competitors in our industry) ​ ● Risks relating to participation in the multi-employer pension plan for certain Company union employees - As outlined in the Note 7 of the Company’s Notes to Consolidated Financial Statements and discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Company participates in a multi-employer union pension plan (Plan) which is currently in “critical and declining status”, as defined by applicable law.
A failure of new or existing products to be favorably received, a failure to retain preferred shelf space at retailers or a failure to sufficiently counter aggressive promotional and price competition could have an adverse impact on the Company’s results of operations and financial condition. ​ ● Risk of discounting and other competitive actions - Discounting and pricing pressure by the Company’s retail customers and other competitive actions could make it more difficult for the Company to maintain its 5 Table of Contents operating margins.
A failure of new or existing products to be favorably received, a failure to retain preferred shelf space at retailers or a failure to sufficiently counter aggressive promotional and price competition could have an adverse impact on the Company’s results of operations and financial condition.
Software failure or corruption, including cyber-based attacks or network security breaches, or catastrophic hardware or software failures or other disasters could disrupt communications, supply chain planning and activities relating to sales demand forecasts, materials procurement, production and inventory planning, customer orders, shipments, and collections, and financial and accounting, all of which could negatively impact sales and profits. ​ ● Risk of releasing sensitive information - Although the Company does not believe that it maintains a large amount of sensitive data, a system breach, whether inadvertent or perpetrated by hackers, could result in identity theft, ransomware and/or a disruption in operations which could expose the Company to financial costs and adversely affect profitability. ​ ● Disruption to the Company’s supply chain could impair the Company’s ability to produce or deliver its finished products, resulting in a negative impact on operating results - Disruptions to the manufacturing operations or supply chain, some of which are discussed above, could result from, but are not limited to, unpredictable events such as natural disasters, pandemics, weather, fire or explosion, earthquakes, terrorism or other acts of violence.
A system breach in the future, whether inadvertent or perpetrated by hackers, could result in identity theft, ransomware and/or a disruption in operations which could expose the Company to financial costs and adversely affect profitability. ​ ● Disruptions to the Company’s supply chain could impair the Company’s ability to produce or deliver its finished products, resulting in a negative impact on operating results - Disruptions to the manufacturing operations or supply chain, some of which are discussed above, could result from, but are not limited to, unpredictable events such as natural disasters, pandemics, weather, fire or explosion, earthquakes, terrorism or other acts of violence.
Currency exchange rate fluctuations between the U.S. dollar and foreign currencies could also have an adverse impact on the Company’s results of operations and financial condition. The Company’s principal markets are the U.S.A., Canada, and Mexico. ​ ● Risk of tariffs – The Company has manufacturing operations outside the US and imports a significant amount of product specifically from Canada.
Currency exchange rate fluctuations between the U.S. dollar and foreign currencies could also have an adverse impact on the Company’s results of operations and financial condition.
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Department of Health and Human Services and the U.S. Food and Drug Administration (“FDA”) and various state legislation, the food industry is subject to increasing laws and regulations, as well as changes in consumer expectations and behavior, which may impact the ingredients used in our products among other things.
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For example, in April 2025, it was announced that the FDA intends to phase out the approved use of certain synthetic dyes in food products, which the Company uses in some of its products.
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Many states, including West Virginia, have passed, or are in the process of passing, legislation that prohibits or restricts the sales of products with certain synthetic dyes within their respective states. In addition to legislation regarding synthetic dyes in food products, the Company anticipates continued developments in food industry legislation and regulatory requirements at the federal and state level.
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While the significance of the impact of these changes, including changing consumer expectations and behavior, remains uncertain at this time, the Company continues to monitor and evaluate the evolving legal and regulatory landscape and consumer trends. ​ ● Risk of labor stoppages - To the extent the Company experiences any significant labor stoppages and disputes, labor organizing efforts, strikes or possible labor shortages, could negatively affect overall operations including production or shipments of finished product to customers. ​ 6 Table of Contents ● Risk of the cost of energy increasing and overall inflation - Higher energy costs as well as overall inflation would likely result in higher plant overhead, distribution, freight and delivery, and other operating costs.
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We have been subject to cyber-attacks, although these incidents historically have not had a material impact on our business operations.
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Any software failure or corruption in the future, including cyber-based attacks or network security breaches, or catastrophic hardware or software failures or other disasters could disrupt communications, supply chain planning and activities relating to sales demand forecasts, materials procurement, production and inventory planning, customer orders, shipments, and collections, and financial and accounting, all of which could negatively impact sales and profits. ​ ● Risk of releasing sensitive information – We have been subject to security breaches in the past, although these incidents historically have not had a material impact on our business operations.
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New legislation or an enforcement action in this area could harm our reputation and financial results. ​ ● Risk of the imposition of tariffs and other surcharges on our products and the ingredients, packaging and operating equipment and supplies used in our products - Our products are principally produced and sold in North America.
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Product shipped and transferred between the United States and our Canada and Mexico manufacturing operations qualify under the U.S.-Mexico-Canada Agreement (“USMCA”) and under the current regulation, continue to be tariff-free.
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If regulators decide to impose tariffs, if the outcome of negotiations of the USMCA (which expires at June 30, 2026) is adverse to our cross-border shipments, or other surcharges are levied by Canada and Mexico, on products that previously qualified under USMCA, the impact of tariffs on our cross-border shipments could be significant.
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Notwithstanding, we procure certain ingredients, including edible oils, as well as some packaging and other operating equipment and supplies, from sources outside of the United States which are currently subject to tariffs.
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The Company’s principal markets are the U.S.A., Canada, and Mexico. ​ ● Risk of tariffs – The Company has manufacturing operations outside the USA, principally Mexico and Canada, and imports a significant amount of product into the USA from Canada.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, the Company’s cyber insurance may not be sufficient in type or amount to cover claims related to security breaches and cyber-attacks. ​ The Company has not experienced any material cybersecurity incidents or a series of related unauthorized occurrences for the year ended December 31, 2024, and the Company is not currently aware of any cyber security attacks or breaches that are reasonably likely to materially affect the Company’s business, business strategy, operating results or financial condition.
Biggest changeIn addition, the Company’s cyber insurance may not be sufficient in type or amount to cover claims related to security breaches and cyber-attacks. ​ While we are regularly subject to cybersecurity incidents, the Company has not experienced any material cybersecurity incidents or a series of related unauthorized occurrences for the year ended December 31, 2025, and the Company is not currently aware of any cyber security attacks or breaches that are reasonably likely to materially affect the 10 Table of Contents Company’s business, business strategy, operating results or financial condition.
Our Company-wide information security training program includes security awareness training, including regular phishing simulations, cyber wellness training and other targeted training and simulations. These programs provide employees the opportunity to gain an understanding and awareness of the various forms of cybersecurity incidents, including how to identify and report any suspicious activity or threat. ​ ​ 10 Table of Contents ​
Our Company-wide information security training program includes security awareness training, including regular phishing simulations, cyber wellness training and other targeted training and simulations. These programs provide employees the opportunity to gain an understanding and awareness of the various forms of cybersecurity incidents, including how to identify and report any suspicious activity or threat. ​ ​ 11 Table of Contents ​
Our cybersecurity risk program is designed to identify, assess, prioritize and mitigate risks across the organization; and to ensure that cyber risks are not viewed in isolation, but are 9 Table of Contents assessed, prioritized and managed in alignment with the Company’s other operational, financial and strategic risk mitigation strategies. ​ We continuously monitor and update our information technology networks and infrastructure in an effort to prevent, detect, address and mitigate risks associated with unauthorized access, misuse, computer viruses and other events that could have a security impact.
Our cybersecurity risk program is designed to identify, assess, prioritize and mitigate risks across the organization; and to ensure that cyber risks are not viewed in isolation, but are assessed, prioritized and managed in alignment with the Company’s other operational, financial and strategic risk mitigation strategies. ​ We continuously monitor and update our information technology networks and infrastructure in an effort to prevent, detect, address and mitigate risks associated with unauthorized access, misuse, computer viruses and other events that could have a security impact.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile it is not possible to predict the outcome of such matters with certainty, in the Company’s opinion, both individually and in the aggregate, they are not expected to have a material effect on the Company’s financial condition, results of operations or cash flows. ​ ​
Biggest changeWhile it is not possible to predict the outcome of such matters with certainty, in the Company’s opinion, both individually and in the aggregate, they are not expected to have a material effect on the Company’s financial condition, results of operations or cash flows. ​ ​ ITEM 4.
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Mine Safety Disclosure s . ​ None. ​ ​ 12 Table of Contents PART II ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn addition, the Company estimates that as of February 9, 2025 there were 87,000 and 130 beneficial holders of common and Class B common stock, respectively. ​ The following table sets forth information about the shares of its common stock the Company purchased on the open market during the fiscal quarter ended December 31, 2024: ​ ​ Issuer Purchases of Equity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Maximum Number (or ​ ​ Total ​ Average ​ Shares Purchased ​ Approximate Dollar Value) ​ ​ Number ​ Price ​ as Part of Publicly ​ of Shares that May Yet ​ ​ of Shares ​ Paid per ​ Announced Plans ​ be Purchased Under the Period ​ Purchased ​ Share ​ or Programs ​ Plans or Programs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Oct 1 to Oct 31 217,418 ​ $ 30.02 Not Applicable Not Applicable ​ Nov 1 to Nov 30 70,952 ​ 30.09 Not Applicable Not Applicable ​ Dec 1 to Dec 31 82,867 ​ 32.10 Not Applicable Not Applicable ​ Total 371,237 ​ $ 30.50 ​ ​ ​ ​ ​ ​ All of the above share purchases were made in the open market.
Biggest changeIn addition, the Company estimates that as of February 11, 2026 there were 85,000 and 130 beneficial holders of common and Class B common stock, respectively. ​ The following table sets forth information about the shares of its common stock the Company purchased on the open market during the fiscal quarter ended December 31, 2025: ​ ​ Issuer Purchases of Equity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ ​ ​ Maximum Number (or ​ ​ Total ​ Average ​ Shares Purchased ​ Approximate Dollar Value) ​ ​ Number ​ Price ​ as Part of Publicly ​ of Shares that May Yet ​ ​ of Shares ​ Paid per ​ Announced Plans ​ be Purchased Under the Period ​ Purchased ​ Share ​ or Programs ​ Plans or Programs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Oct 1 to Oct 31 — ​ $ — Not Applicable Not Applicable ​ Nov 1 to Nov 30 — ​ — Not Applicable Not Applicable ​ Dec 1 to Dec 31 — ​ — Not Applicable Not Applicable ​ Total — ​ $ — ​ ​ ​ ​ ​ ​ The Company did not make any share purchases in the fourth quarter of 2025.
The Company does not have a formal dividend policy, but has historically issued quarterly dividends and in 2024 issued quarterly dividends of $0.09 per share. The Company has also historically distributed an annual 3% stock dividend.
The Company does not have a formal dividend policy, but has historically issued quarterly dividends and in 2025 issued quarterly dividends of $0.09 per share. The Company has also historically distributed an annual 3% stock dividend.
While the Company plans to continue to issue quarterly cash dividends and the annual stock dividend there can be no assurance that it will continue to do so in the future. ​ 12 Table of Contents ​ Performance Graph ​ The following performance graph compares the cumulative total shareholder return on the Company’s common stock for a five-year period (December 31, 2019 to December 31, 2024) with the cumulative total return of Standard & Poor’s 500 Stock Index (“S&P 500”) and the Dow Jones Industry Food Index (“Peer Group,” which includes the Company), assuming (i) $100 invested on December 31 of the first year of the chart in each of the Company’s common stock, S&P 500 and the Dow Jones Industry Food Index and (ii) the reinvestment of cash and stock dividends. ​ ​ ITEM 6. [RESERVED] ​
While the Company plans to continue to issue quarterly cash dividends and the annual stock dividend there can be no assurance that it will continue to do so in the future. ​ 13 Table of Contents ​ Performance Graph ​ The following performance graph compares the cumulative total shareholder return on the Company’s common stock for a five-year period (December 31, 2020 to December 31, 2025) with the cumulative total return of Standard & Poor’s 500 Stock Index (“S&P 500”) and the Dow Jones Industry Food Index (“Peer Group,” which includes the Company), assuming (i) $100 invested on December 31 of the first year of the chart in each of the Company’s common stock, S&P 500 and the Dow Jones Industry Food Index and (ii) the reinvestment of cash and stock dividends. ​ ​ ​ ITEM 6. [RESERVED] ​
The Class B common stock is convertible at the option of the holder into shares of common stock on a share-for-share basis. As of February 9, 2025 there were approximately 2,200 and 800 registered holders of record of common and Class B common stock, respectively.
The Class B common stock is convertible at the option of the holder into shares of Class A common stock on a share-for-share basis. As of February 11, 2026 there were approximately 2,100 and 730 registered holders of record of common and Class B common stock, respectively.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeITEM 6. [RESERVED] 13 ​ ​ ​ ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13 ​ ​ ​ ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 24 ​ ​ ​ ITEM 8. Financial Statements and Supplementary Data 24 ​ ​ ​
Biggest changeITEM 6. [RESERVED] 14 ​ ​ ​ ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14 ​ ​ ​ ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 25 ​ ​ ​ ITEM 8. Financial Statements and Supplementary Data 25 ​ ​ ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAverage shares outstanding decreased from 71,903 in 2023 to 71,320 in 2024 which reflects share repurchases of $13,534 during 2024. ​ Beginning in 2012, the Company received periodic notices from the Bakery and Confectionery Union and Industry International Pension Fund (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”, 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.
Biggest changeWe have estimated that our 2025 incremental cost of tariffs was approximately $3.7 million, which includes estimates of tariffs that were paid directly by our suppliers and passed on to us. ​ We are focused on the longer term and therefore are continuing to make investments in plant manufacturing operations to meet new customer and consumer product demands, achieve product quality improvements, expand capacity in certain product lines, and increase operational efficiencies in order to provide genuine value to consumers. ​ Beginning in 2012, the Company received periodic notices from the Bakery and Confectionery Union and Industry International Pension Fund (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”, 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.
If the entity determines, on the basis of certain qualitative factors, that it is more-likely-than-not that the intangibles (goodwill and certain trademarks) are not impaired, the entity would not need to proceed to the two step impairment testing process (quantitative analysis) as prescribed in the guidance.
If the entity determines, on the basis of certain qualitative factors, that it is more-likely-than-not that the intangibles (goodwill and certain trademarks) are not impaired, the entity would not need to proceed to the two step impairment testing process (quantitative analysis) as prescribed in the guidance.
The Company does not invest in Level 3 securities, as defined, but may utilize third-party professional valuation firms as necessary to assist in the determination of the value of investments that utilize Level 3 inputs (as defined by guidance) should any of its investments be downgraded to Level 3. ​ Other matters ​ In the opinion of management, other than contracts for foreign currency forwards and raw materials, including currency and commodity hedges and outstanding purchase orders for packaging, ingredients, supplies, operational services, and capital expenditures, all entered into in the ordinary course of business, the Company does not have any significant contractual obligations or future commitments. ​ RECENT ACCOUNTING PRONOUNCEMENTS ​ See Note 1 of the Company’s Notes to Consolidated Financial Statements. ​ MARKET RISKS ​ The Company is exposed to market risks related to commodity prices, interest rates, investments in marketable securities, equity price and foreign exchange. 21 Table of Contents ​ The Company’s ability to forecast the direction and scope of changes to its major input costs is impacted by significant potential volatility in crude oil and energy, sugar, corn, edible oils, cocoa and cocoa powder, and dairy products markets.
The Company does not invest in Level 3 securities, as defined, but may utilize third-party professional valuation firms as necessary to assist in the determination of the value of investments that utilize Level 3 inputs (as defined by guidance) should any of its investments ever be downgraded to Level 3. ​ Other matters ​ In the opinion of management, other than contracts for foreign currency forwards and raw materials, including currency and commodity hedges and outstanding purchase orders for packaging, ingredients, supplies, operational services, and 22 Table of Contents capital expenditures, all entered into in the ordinary course of business, the Company does not have any significant contractual obligations or future commitments. ​ RECENT ACCOUNTING PRONOUNCEMENTS ​ See Note 1 of the Company’s Notes to Consolidated Financial Statements. ​ MARKET RISKS ​ The Company is exposed to market risks related to commodity prices, interest rates, investments in marketable securities, equity price and foreign exchange. ​ The Company’s ability to forecast the direction and scope of changes to its major input costs is impacted by significant potential volatility in crude oil and energy, sugar, corn, edible oils, cocoa and cocoa powder, and dairy products markets.
The Trustees advised that they have concluded that continuing increases in surcharges would likely have a long-term adverse effect on the solvency of the Plan. The Trustees concluded that further increases would result in increasing financial hardships and withdrawals of participating employers, and that this change will not have a material effect on the Plan’s insolvency date.
The Trustees advised that they have concluded that continuing increases in surcharges would likely have a long-term adverse effect on the solvency of the Plan. The Trustees also concluded that further increases would result in increasing financial hardships and withdrawals of participating employers, and that this change will not have a material effect on the Plan’s insolvency date.
Company management understands that this legislation would provide financial assistance from the PBGC to shore up financially distressed multi-employer plans to ensure that they can remain solvent and continue to pay benefits to retirees through 2051 without any reduction in retiree benefits.
Company management understands and believes that this legislation would provide financial assistance from the PBGC to shore up financially distressed multi-employer plans to ensure that they can remain solvent and continue to pay benefits to retirees through 2051 without any reduction in retiree benefits.
Although management seeks to substantially recover cost increases over the long-term, there is risk that higher price realization cannot be fully passed on to customers and, to the extent they are passed on, they could adversely affect customer and consumer acceptance and resulting sales volume. ​ The Company utilizes commodity futures contracts, as well as annual supply agreements, to hedge and plan for anticipated purchases of certain ingredients, including sugar, in order to mitigate commodity cost fluctuation.
Although management seeks to substantially recover cost increases over the long-term, there is risk that higher price realization cannot be fully passed on to customers and, to the extent they are passed on, they could adversely affect customer and consumer acceptance and resulting sales volume. ​ The Company utilizes commodity futures contracts, as well as annual supply agreements, to hedge (primarily sugar) and plan for anticipated purchases of certain ingredients in order to mitigate commodity cost fluctuation.
In accordance with current accounting guidance, these indefinite-lived intangible assets are assessed at least annually for impairment as of December 31 or whenever events or circumstances indicate that the carrying values may not be recoverable from future cash flows. No impairments were recorded in 2024, 2023 or 2022.
In accordance with current accounting guidance, these indefinite-lived intangible assets are assessed at least annually for impairment as of December 31 or whenever events or circumstances indicate that the carrying values may not be recoverable from future cash flows. No impairments were recorded in 2025, 2024 or 2023.
Write-offs of bad debts did not exceed 0.2% of net product sales in each of 2024, 2023 and 2022, and accordingly, have not been significant to the Company’s financial position or results of operations. ​ Intangible assets ​ The Company’s intangible assets consist primarily of goodwill and acquired trademarks.
Write-offs of bad debts did not exceed 0.2% of net product sales in each of 2025, 2024 and 2023, and accordingly, have not been significant to the Company’s financial position or results of operations. ​ Intangible assets ​ The Company’s intangible assets consist primarily of goodwill and acquired trademarks.
During fourth quarter 2024, the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance. ​ The Company determines the fair value of certain trademarks using discounted cash flows and estimates of royalty rates.
During fourth quarter 2025, the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance. ​ The Company determines the fair value of certain trademarks using discounted cash flows and estimates of royalty rates.
The Company utilizes professional money managers and maintains investment policy guidelines which emphasize high quality and liquidity in order to minimize the potential loss exposures that could result in the event of higher interest rates, a default or other adverse event.
The Company utilizes a professional money manager and maintains investment policy guidelines which emphasize high quality and liquidity in order to minimize the potential loss exposures that could result in the event of higher interest rates, a default or other adverse event.
Investments classified as available for sale primarily comprise high quality corporate bonds which are generally not sold prior to maturity, which is typically three to five years. The Company uses a “ladder” approach to its maturities so that approximately 20% to 35% of the portfolio matures each year with the objective of achieving higher yields with minimum interest rate risk.
Investments classified as available for sale primarily comprise high quality corporate bonds which are generally not sold prior to maturity, with maturities typically three to five years. The Company uses a “ladder” approach to its maturities so that approximately 20% to 35% of the portfolio matures each year with the objective of achieving higher yields with limited interest rate risk.
This amount is not significant compared with the net earnings and shareholders’ equity of the Company. ​ Interest rates ​ Interest rate risks primarily relate to the Company’s investments in available for sale marketable securities with maturity dates of generally three to five years. ​ The majority of the Company’s investments which are classified as available for sale have generally not been sold prior to their maturity, which is typically three to five years.
This amount is not significant compared with the net earnings and shareholders’ equity of the Company. ​ 23 Table of Contents Interest rates ​ Interest rate risks primarily relate to the Company’s investments in available for sale marketable securities with maturity dates of generally three to five years. ​ The majority of the Company’s investments which are classified as available for sale have generally not been sold prior to their maturity, which is typically three to five years.
The Company’s significant accounting policies are discussed in Note 1 of the Company’s Notes to Consolidated Financial Statements. ​ Following is a summary and discussion of the more significant accounting policies and estimates which management believes to have a significant impact on the Company’s operating results, financial position, cash flows and footnote disclosure. ​ 19 Table of Contents Revenue recognition ​ As further discussed in Note 1 of the Company’s Notes to Consolidated Financial Statements, the Company follows the revenue recognition guidance in ASC 606.
The Company’s significant accounting policies are discussed in Note 1 of the Company’s Notes to Consolidated Financial Statements. ​ Following is a summary and discussion of the more significant accounting policies and estimates which management believes to have a significant impact on the Company’s operating results, financial position, cash flows and footnote disclosure. ​ Revenue recognition ​ As further discussed in Note 1 of the Company’s Notes to Consolidated Financial Statements, the Company follows the revenue recognition guidance in ASC 606.
Discussions comparing the results of the twelve months ended December 31, 2023 as compared to same period of 2022 can be found in 13 Table of Contents “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Form 10-K for the year ended December 31, 2023. ​ FINANCIAL REVIEW ​ This financial review discusses the Company’s financial condition, results of operations, liquidity and capital resources, significant accounting policies and estimates, new accounting pronouncements, market risks and other matters.
Discussions comparing the results of the twelve months ended December 31, 2024 as compared to same period of 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Form 10-K for the year ended December 31, 2024. ​ 14 Table of Contents FINANCIAL REVIEW ​ This financial review discusses the Company’s financial condition, results of operations, liquidity and capital resources, significant accounting policies and estimates, new accounting pronouncements, market risks and other matters.
Earnings per share in both fourth quarter and twelve months 2024 benefited by the reduction in average shares outstanding resulting from purchases of the Company’s common stock in the open market by the Company.
Earnings per share in both fourth quarter and twelve months 2025 benefited by the reduction in average shares outstanding resulting from purchases of the Company’s common stock in the open market by the Company.
This section of this Form 10-K generally discusses the twelve months ended December 31, 2024 as compared to the same period of 2023.
This section of this Form 10-K generally discusses the twelve months ended December 31, 2025 as compared to the same period of 2024.
Product cost of goods sold includes $803 and $814 in certain deferred compensation expenses in 2024 and 2023, respectively. These deferred compensation 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.
Product cost of goods sold includes $698 and $803 in certain deferred compensation expenses in 2025 and 2024, respectively. These deferred compensation 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.
The aforementioned is based on a range of valuations and interest rates which the Company’s actuary has advised is provided under the statute.
The aforementioned is based on a range of interest rates which the Company’s actuary has advised is provided under the statute.
In first quarter 2021, the local bargaining union and the Company executed this agreement which resulted in the “freezing” of such surcharges as of December 31, 2020. ​ The Company’s pension expense for this Plan for twelve months 2024 and 2023 was $3,332 and $3,516, respectively.
In first quarter 2021, the local bargaining union and the Company executed this agreement which resulted in the “freezing” of such surcharges as of December 31, 2020. ​ The Company’s pension expense for this Plan for twelve months 2025 and 2024 was $3,290 and $3,332, respectively.
The Company has no special financing arrangements or “off-balance sheet” special purpose entities. Cash flows from operations plus maturities of short-term investments are expected to be adequate to meet the Company’s overall financing needs, including capital expenditures, in 2025.
The Company has no special financing arrangements or “off-balance sheet” special purpose entities. Cash flows from operations plus maturities of investments are expected to be adequate to meet the Company’s overall financing needs, including capital expenditures, in 2026.
The unrealized gains and losses on such contracts are deferred as a component of accumulated other comprehensive loss (or gain) and are recognized as a component of product cost of goods sold when the related inventory is sold. ​ The potential change in fair value of commodity and foreign currency derivative instruments held by the Company at December 31, 2024, assuming a 10% change in the underlying contract price, was $4,709.
The unrealized gains and losses on such contracts are deferred as a component of accumulated other comprehensive loss (or gain) and are recognized as a component of product cost of goods sold when the related inventory is sold. ​ The potential change in fair value of commodity and foreign currency derivative instruments held by the Company at December 31, 2025, assuming a 10% change in the underlying contract price, was $3,209.
Cash flow projections require the Company to make assumptions and estimates regarding the Company’s future plans, including sales projections and profit margins, market based discount rates, competitive factors, and economic conditions; and the Company’s actual results and conditions may differ over time.
Cash flow projections require the Company to make assumptions and estimates regarding the Company’s future plans, including sales projections and profit margins, market based discount rates, competitive factors, and economic conditions; and the Company’s actual 21 Table of Contents results and conditions may differ over time.
Management believes that operating losses at its Spanish subsidiary are expected to continue beyond 2025 and that these future losses, as well as some capital expenditures, will likely require additional cash financing. ​ The Company believes that the carrying values of its goodwill and trademarks have indefinite lives as they are expected to generate cash flows indefinitely.
Nonetheless, Management believes that operating losses at its Spanish subsidiary will continue in 2026 and that these future losses, as well as some capital expenditures, will likely require additional cash financing. ​ The Company believes that the carrying values of its goodwill and trademarks have indefinite lives as they are expected to generate cash flows indefinitely.
See also Note 7 of the Company’s Notes to Consolidated Financial Statements on Form 10-K for the year ended December 31, 2024. ​ 18 Table of Contents The Company is focused on the longer term and therefore is continuing to make investments in plant manufacturing operations to meet new consumer and customer product demands, achieve product quality improvements, expand capacity in certain product lines, and increase operational efficiencies in order to provide genuine value to consumers. ​ LIQUIDITY AND CAPITAL RESOURCES ​ Cash flows from operating activities were $138,889, $94,611 and $72,051 in 2024, 2023 and 2022, respectively.
See also Note 7 of the Company’s Notes to Consolidated Financial Statements on Form 10-K for the year ended December 31, 2025. ​ The Company is focused on the longer term and therefore is continuing to make investments in plant manufacturing operations to meet new consumer and customer product demands, achieve product quality improvements, expand capacity in certain product lines, and increase operational efficiencies in order to provide genuine value to consumers. ​ LIQUIDITY AND CAPITAL RESOURCES ​ Cash flows from operating activities were $130,614, $138,889 and $94,611 in 2025, 2024 and 2023, respectively.
Contributions of $20,000 and $5,000 were made to this trust in 2023 and 2022, respectively; no contribution was made to the trust during 2024. The Company uses these funds to pay the actual cost of such benefits over each union contract period.
Contributions of $20,000 were made to this trust in 2023; no contribution was made to the trust during 2024 and 2025. The Company uses these funds to pay the actual cost of such benefits over each union contract period.
Selling, marketing and administrative expenses include $15,521 and $14,675 in certain deferred compensation expenses in 2024 and 2023, respectively. These deferred compensation 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.
Selling, marketing and administrative expenses include $15,653 and $15,521 in certain deferred compensation expenses in 2025 and 2024, respectively. These deferred compensation 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.
All capital expenditures have been and are expected to be funded from the Company’s cash flow from operations and internal sources including available for sale securities. ​ Other than the bank loans and the related restricted cash of the Company’s Spanish subsidiary which are discussed in Note 1 of the Company’s Notes to Consolidated Financial Statements, the Company had no bank borrowings or repayments in 2022, 2023, or 2024, and had no outstanding bank borrowings as of December 31, 2023 or 2022.
All capital expenditures have been and are expected to be funded from the Company’s cash flow from operations and internal sources including investments in available for sale securities. ​ Other than the bank loans and the related restricted cash of the Company’s Spanish subsidiary which are discussed in Note 1 of the Company’s Notes to Consolidated Financial Statements, the Company had no bank borrowings or repayments in 2023, 2024, or 2025.
This asset value is included in prepaid expenses and long-term other assets in the Company’s Consolidated Statement of Financial Position and is categorized as Level 1 within the fair value hierarchy. ​ Cash flows from investing activities reflect capital expenditures of $17,997, $26,796, and $23,356 in 2024, 2023 and 2022, respectively.
This asset value is included in prepaid expenses and long-term other assets in the Company’s Consolidated Statement of Financial Position and is categorized as Level 1 within the fair value hierarchy. ​ Cash flows from investing activities reflect capital expenditures of $34,263, $17,997, and $26,796 in 2025, 2024 and 2023, respectively.
Cash dividends of $25,515, $25,076, and $24,629 were paid in 2024, 2023 and 2022, respectively. ​ CRITICAL ACCOUNTING POLICIES AND ESTIMATES ​ Preparation of the Company’s financial statements involves judgments and estimates due to uncertainties affecting the application of accounting policies, and the likelihood that different amounts would be reported under different conditions or using different assumptions.
Cash dividends of $26,066, $25,515, and $25,076 were paid in 2025, 2024 and 2023, respectively. ​ CRITICAL ACCOUNTING POLICIES AND ESTIMATES ​ Preparation of the Company’s financial statements involves judgments and estimates due to uncertainties affecting the application of accounting policies, and the likelihood that different amounts would be reported under different conditions or using different assumptions.
When compared to the Plan valuation date of January 1, 2011 (just prior to the Plan being certified to be in “critical status”), current active employee participants have declined 55%, whereas participants who were retired or separated from service and receiving benefits increased 3% and participants who were retired or separated from service and entitled to future benefits increased 6%. ​ The Company has been advised that its withdrawal liability would have been $97,500, $102,200 and $96,000 if it had withdrawn from the Plan during 2024, 2023 and 2022 respectively (most recent information provided by the Plan).
When compared to the Plan valuation date of January 1, 2011 (just prior to the Plan being certified to be in “critical status”), current active employee participants have declined 54%, whereas participants who were retired or separated from service and receiving benefits increased 1% and participants who were retired or separated from service and entitled to future benefits increased 2%. ​ The Company has been advised that its withdrawal liability would have been $102,800, $97,500 and $102,200 if it had withdrawn from the Plan during 2025, 2024 and 2023 respectively (most recent information provided by the Plan).
Current accounting guidance provides entities an option of performing a qualitative assessment (a "step-zero" test) before 15 Table of Contents performing a quantitative analysis.
Current accounting guidance provides entities an option of performing a qualitative assessment (a "step-zero" test) before performing a quantitative analysis.
During fourth quarter 2024 (and fourth quarters 2023 and 2022), the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance.
During fourth quarter 2025 16 Table of Contents (and fourth quarters 2024 and 2023), the Company performed a “step zero” test of its goodwill and certain trademarks, and concluded that there was no impairment based on this guidance.
Other income, net also includes foreign exchange gains (losses) of $511 and $(2,803) in 2024 and 2023, respectively. ​ On December 3, 2024, the Board of Directors (the “Board”) of the Company revoked its prior action dated December 28, 2018 that permitted management to take appropriate action to preserve the full income tax deductibility of certain amounts under its nonqualified deferred compensation plans in light of changes to Section 162(m) of Internal Revenue Code made by the Tax Cuts and Jobs Act of 2017 (“TCJA”).
Other income, net also includes foreign exchange gains (losses) of ($1,711) and $511 in 2025 and 2024, respectively. ​ In December 2024, the Board of Directors (the “Board”) of the Company revoked its prior action in December 2018 that permitted management to take appropriate action to preserve the full income tax deductibility of certain amounts under its nonqualified deferred compensation plans in light of changes to Section 162(m) of Internal Revenue Code made by the Tax Cuts and Jobs Act of 2017 (“TCJA”).
The Company also may purchase forward foreign exchange contracts to hedge its costs of manufacturing certain products in Canada for sale and distribution in the United States (U.S.A.), and periodically does so for purchases of equipment or raw materials from foreign suppliers.
The Company also may purchase forward foreign exchange contracts to hedge its costs of manufacturing certain products in Canada for sale and distribution in the USA, and periodically does so for purchases of equipment or raw materials from foreign suppliers.
See Note 10 of the Company’s Notes to Consolidated Financial Statements for outstanding foreign exchange forward contracts as of December 31, 2024. ​ 23 Table of Contents ​ ​
See Note 10 of the Company’s Notes to Consolidated Financial Statements for outstanding foreign exchange forward contracts as of December 31, 2025. 24 Table of Contents ​ ​
At December 31, 2024 and 2023, the VEBA trust held $13,926 and $19,126 respectively, of aggregate cash and cash equivalents, which the Company expects to use to pay certain union employee benefits through part or all of 2027.
At December 31, 2025 and 2024, the VEBA trust held $8,953 and $13,926 respectively, of aggregate cash and cash equivalents, which the Company expects to use to pay certain union employee benefits through part or all of 2027.
For these trademarks, holding all other assumptions constant, as of December 31, 2024, a 100 basis point increase in the discount rate would reduce the fair value of these trademarks by approximately 12% and a 100 basis point decrease in the royalty rate would increase the fair value of these trademarks by approximately 16%.
For these trademarks, holding all other assumptions constant, as of December 31, 2025, a 100 basis point increase in the discount rate would reduce the fair value of these trademarks by approximately 11% and a 100 basis point decrease in the royalty rate would reduce the fair value of these trademarks by approximately 9%.
The Company records valuation allowances, or may actually adjust or write-off deferred tax assets, in situations where the realization of deferred tax assets, including those relating to net operating tax losses, is not more-likely-than-not; and the Company adjusts and releases such valuation allowances when realization becomes more-likely-than-not as defined by accounting guidance.
The Company records valuation allowances, or may actually adjust or write-off deferred tax assets, in situations where the realization of deferred tax assets is not more-likely-than-not; and the Company adjusts and releases such valuation allowances when realization becomes more-likely-than-not as defined by accounting guidance.
In addition, for withdrawal liability purposes, PBGC regulations require the Special Financial Assistance to be phased-in over a period of time instead of fully recognized immediately. 17 Table of Contents ​ Based on the Company’s most recent actuarial estimates using the information provided by the Plan with respect to its 2024 withdrawal liability (based on most recent information provided to the Company) and certain provisions in ERISA and laws relating to withdrawal liability payments, management believes that the Company’s liability had the Company withdrawn in 2024 would likely be limited to twenty annual payments of $2,664 which have a present value in the range of $31,262 to $37,654 depending on the interest rate used to discount these payments.
In addition, for withdrawal liability purposes, PBGC regulations require the Special Financial Assistance to be phased-in over a period of time instead of fully recognized immediately. ​ Based on the Company’s most recent actuarial estimates using the information provided by the Plan with respect to its 2025 withdrawal liability (based on most recent information provided to the Company) and certain provisions in ERISA and laws relating to withdrawal liability payments, management believes that the Company’s liability had the Company withdrawn in 2025 would likely be limited to twenty annual payments of $2,706 which have a present value in the range of $32,904 to $35,413 depending on the interest rate used to discount these payments.
While the Company’s actuarial consultant did 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.
While the Company’s actuarial consultant does not anticipate that the Plan will incur 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.
Other income, net includes investment income from available for sale securities of $9,598 and $5,211 in 2024 and 2023, respectively, which reflects both higher interest rates and related investment returns on the Company’s available for sale marketable securities, as well as an increase in the average balances in 2024 on such securities.
Other income, net includes investment income from available for sale securities of $20,186 and $9,598 in 2025 and 2024, respectively, which reflects both higher interest rates and related investment returns on the Company’s available for sale investments in marketable securities, as well as an increase in the average balances in 2025 compared to 2024 on such securities.
The Company is currently pursuing a plant expansion, including additional and replacement of certain processing and packaging lines, to better meet its higher level of forecasted demand for certain products on a timelier and more cost effective basis.
The Company is currently undergoing a plant expansion at one of its manufacturing facilities in the USA, including additional and replacement of certain processing and packaging lines, to better meet its higher level of forecasted demand for certain products on a timelier and more cost-effective basis.
Therefore, the Company does not believe that it has significant interest rate risk with respect to its interest bearing debt. ​ Investment in marketable securities ​ As stated above, the Company’s investments classified as available for sale primarily include marketable securities which mature in three to five years and variable rate demand notes (VRDNs).
Therefore, the Company does not believe that it has significant interest rate risk with respect to its interest bearing debt. ​ Investment in marketable securities ​ As stated above, the Company’s investments classified as available for sale primarily include marketable securities which mature in three to five years. The Company’s marketable securities are generally not sold prior to maturity.
It should be read in conjunction with the Consolidated Financial Statements and related Notes that follow this discussion. ​ FINANCIAL CONDITION ​ The Company’s overall financial position remains strong given that aggregate cash, cash equivalents and investments is $526,968 at December 31, 2024, including $105,067 in trading securities discussed below.
It should be read in conjunction with the Consolidated Financial Statements and related Notes that follow this discussion. ​ FINANCIAL CONDITION ​ The Company’s overall financial position remains strong given that aggregate cash, cash equivalents and investments is $613,747 at December 31, 2025, including $121,541 in trading securities discussed below.
The Company’s actuary believes that it still remains unclear if the Plan can remain solvent through the targeted date of 2051 although as a requirement of the American Rescue Plan Act of 2021, the Plan must remain in “critical status” through 2051 regardless of solvency.
According to the Company’s actuary, it remains unclear if the Plan can remain solvent through the targeted 19 Table of Contents date of 2051, although as a requirement of the American Rescue Plan Act of 2021, the Plan must remain in “critical status” through 2051 regardless of solvency.
Nonetheless, the Company would consider bank borrowing or other financing in the event that a business acquisition is completed. ​ Financing activities include Company common stock purchases and retirements of $13,534, $33,114, and $31,910 in 2024, 2023 and 2022, respectively.
Nonetheless, the Company would consider bank borrowing or other financing in the event that a business acquisition is completed. ​ 20 Table of Contents Financing activities include Company common stock purchases and retirements of $6,482, $13,534, and $33,114 in 2025, 2024 and 2023, respectively.
Other income, net principally reflects $16,324 and $15,489 of aggregate net gains and investment income on trading securities in 2024 and 2023, respectively.
Other income, net principally reflects $16,351 and $16,324 of aggregate net gains and investment income on trading securities in 2025 and 2024, respectively.
Cash flows from 2024 operating activities totaled $138,889 compared to $94,611 in 2023, and are discussed in the section entitled Liquidity and Capital Resources.
Cash flows from 2025 operating activities totaled $130,614 compared to $138,889 in 2024, and are discussed in the section entitled Liquidity and Capital Resources.
Individually, a 100 basis point increase in the discount rate or a 100 basis point decrease in the royalty rate would not resul t in a potential impairment as of December 31, 2024. ​ Earnings from operations were $100,505 in 2024 compared to $101,828 in 2023, a decrease of $1,323.
Individually, a 100 basis point increase in the discount rate or a 100 basis point decrease in the royalty rate would not resul t in a potential impairment as of December 31, 2025. ​ Earnings from operations were $100,939 in 2025 compared to $100,505 in 2024, an increase of $434.
The Company invests in trading securities to provide an economic hedge for its deferred compensation liabilities, as further discussed herein and in Note 7 of the Company’s Notes to Consolidated Financial Statements. ​ Shareholders’ equity increased from $823,422 at December 31, 2023 to $870,743 as of December 31, 2024, which principally reflects 2024 net earnings of $86,827, less cash dividends of $25,515 and share repurchases of $13,534. ​ The Company has a relatively straight-forward financial structure and has historically maintained a conservative financial position.
The Company invests in trading securities to provide an economic hedge for its deferred compensation liabilities, as further discussed herein and in Note 7 of the Company’s Notes to Consolidated Financial Statements. ​ Shareholders’ equity increased from $870,743 at December 31, 2024 to $940,972 as of December 31, 2025, which principally reflects 2025 net earnings of $100,052, less cash dividends of $26,066 and share repurchases of $6,482. ​ The Company has a relatively straight-forward financial structure and has historically maintained a conservative financial position.
As a percent of net product sales, these adjusted expenses decreased from 8.6% in 2023 to 8.0% in 2024, a 0.6 favorable percentage point change, which generally reflects the benefits of lower freight surcharges and a more favorable freight market. ​ The Company has foreign operating businesses in Mexico, Canada and Spain, and exports products to many foreign markets.
As a percent of net product sales, these adjusted expenses decreased from 8.0% in 2024 to 7.8% in 2025, a 0.2 favorable percentage point change, which generally reflects the benefits of sales price increases. ​ The Company has foreign operating businesses in Mexico, Canada and Spain, and exports products to many foreign markets.
Based on the same actuarial estimates, had a mass withdrawal occurred in 2024, the present value of such perpetuities is in the range of $43,650 to $69,266 and would apply in the unlikely event that substantially all employers withdraw from the Plan.
Based on the same actuarial estimates, had a mass withdrawal occurred in 2025, the present value of such perpetuities is in the range of $47,812 to $56,833 and would apply in the unlikely event that substantially all employers withdraw from the Plan.
Adjusting for the above-discussed write-off of deferred tax assets relating to deferred compensation, net earnings in fourth quarter 2024 would have been $33,519 compared to $29,403 in fourth quarter 2023, an increase of $4,116 or 14%, and net earnings in twelve months 2024 would have been $97,837 compared to $91,912 in 2023, an increase of $5,925 or 6%.
Adjusting for the above-discussed write-off of deferred tax assets relating to deferred compensation, net earnings in fourth quarter 2025 would have been $29,116 compared to $33,519 in fourth quarter 2024, a decrease of $4,403 or 13%, and net earnings in twelve months 2025 would have been $103,148 compared to $97,837 in 2024, an increase of $5,311 or 5%.
As of December 31, 2024, the Company’s total cash, cash equivalents and investments, including all long-term investments, was $526,968 compared to $427,028 at December 31, 2023, an increase of $99,940. See Liquidity And Capital Resources section below for discussion. The aforementioned includes $105,067 and $87,800 of investments in trading securities as of December 31, 2024 and 2023, respectively.
As of December 31, 2025, the Company’s total cash, cash equivalents and investments, including all long-term investments, was $613,747 compared to $526,968 at December 31, 2024, an increase of $86,779. See Liquidity And Capital Resources section below for discussion. The aforementioned includes $121,541 and $105,067 of investments in trading securities as of December 31, 2025 and 2024, respectively.
The Company identified changes in business conditions that changed Management’s estimated current and future liabilities resulting in a $5,665 reduction in accrued liabilities and an increase in net product sales in twelve months 2024. ​ Selling, marketing and administrative expenses include freight, delivery and warehousing expenses.
The Company identified changes in business conditions in each of the periods presented that changed Management’s estimated current and future liabilities for prior period obligations resulting in a reduction in accrued liabilities and an increase in net product sales of $2,700 and $5,665 in 2025 and 2024, respectively. ​ Selling, marketing and administrative expenses include freight, delivery and warehousing expenses.
The accompanying chart summarizes the maturities of the Company’s investments in debt securities at December 31, 2024. ​ ​ ​ ​ ​ ​ Less than 1 year $ 55,789 1 – 2 years ​ 46,980 2 – 5 years ​ ​ 180,291 Total ​ $ 283,060 ​ The Company’s outstanding debt at December 31, 2024 and 2023 was $7,500 in an industrial development bond in which interest rates reset each week based on the current market rate.
The accompanying chart summarizes the maturities of the Company’s investments in debt securities at December 31, 2025. ​ ​ ​ ​ ​ ​ Less than 1 year ​ ​ ​ $ 49,468 1 – 2 years ​ 77,233 2 – 5 years ​ ​ 238,340 Total ​ $ 365,041 ​ The Company’s outstanding debt at December 31, 2025 and 2024 was $7,500 in an industrial development bond in which interest rates reset each week based on the current market rate.
Given this Board action and the resulting expectation that certain additional amounts of deferred compensation will not be tax deductible in future years, the Company concluded that it will be required under generally accepted accounting principles in the United States of America to write off the related deferred tax assets.
Given this Board action and the resulting expectation that certain additional amounts of deferred compensation will not be tax deductible in future years, the Company concluded that it should write off the related deferred tax assets based on accounting guidance.
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, 2023, the funded percentage would be 43.6% (not 47.0%).
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 18 Table of Contents of January 1, 2024, the funded percentage would be 41.7% (not 45.2%).
Adjusting for the aforementioned, selling, marketing and administrative expenses decreased from $140,337 in 2023 to $137,154 in 2024, a decrease of $3,183 or 2.3%. As a percent of net product sales, these adjusted expenses increased from 18.4% of net product sales in 2023 to 19.2% of net product sales in 2024, a 0.8 unfavorable percentage point change.
Adjusting for the aforementioned, selling, marketing and administrative expenses increased from $137,154 in 2024 to $141,850 in 2025, an increase of $4,696 or 3.4%. As a percent of net product sales, these adjusted expenses increased from 19.2% of net product sales in 2024 to 19.6% of net product sales in 2025, a 0.4 unfavorable percentage point change.
After carefully considering these facts, the Company determined that it asserts the permanent reinvestment of all of its foreign subsidiaries’ earnings as of December 31, 2024. ​ Net earnings attributable to Tootsie Roll Industries, Inc. were $86,827 in twelve months 2024 compared to $91,912 in 2023, and net earnings per share were $1.22 and $1.28 in 2024 and 2023, respectively, a decrease of $0.06 per share or 4.7%.
After carefully considering these facts, the Company determined that it asserts the permanent reinvestment of all of its foreign subsidiaries’ earnings as of December 31, 2025. ​ Net earnings attributable to Tootsie Roll Industries, Inc. were $100,052 in twelve months 2025 compared to $86,827 in 2024, and net earnings per share were $1.37 and $1.18 in 2025 and 2024, respectively, an increase of $0.19 per share or 16.1%.
After receiving the Special Financial Assistance, the Plan will be required to use PBGC interest rates to value all, instead of a portion, of the present value of vested benefits to provide an estimate of the Company’s withdrawal liability.
As discussed below, the Plan was granted $3.4 billion in Special Financial Assistance in July 2024. After receiving the Special Financial Assistance, the Plan was required to use PBGC interest rates to value all, instead of a portion, of the present value of vested benefits to provide an estimate of the Company’s withdrawal liability.
Earnings from operations include $16,324 and $15,489 in certain deferred compensation expense in 2024 and 2023, respectively, which are discussed above. Adjusting for these deferred compensation expenses, adjusted earnings from operations decreased from $117,317 in 2023 to $116,829 in 2024, a decrease of $488 or 0.4%.
Earnings from operations include $16,351 and $16,324 in certain deferred compensation expense in 2025 and 2024, respectively, which are discussed above. Adjusting for these deferred compensation expenses, adjusted earnings from operations increased from $116,829 in 2024 to $117,290 in 2025, an increase of $461 or 0.4%.
During 2024, the Company paid cash dividends of $25,515, purchased and retired $13,534 of its outstanding shares, and made capital expenditures of $17,997, all of which was financed from internal sources. ​ The Company’s net working capital was $246,319 at December 31, 2024 compared to $245,763 at December 31, 2023.
During 2025, the Company paid cash dividends of $26,066, purchased and retired $6,482 of its outstanding shares, and made capital expenditures of $34,263, all of which was financed from internal sources. ​ The Company’s net working capital was $223,016 at December 31, 2025 compared to $246,319 at December 31, 2024.
Fourth quarter 2024 and 2023 net earnings attributable to Tootsie Roll Industries, Inc. were $22,509 and $29,403, respectively, and net earnings per share were $0.32 and $0.41, respectively, a decrease of $0.09 per share or 22.0%.
Fourth quarter 2025 and 2024 net earnings attributable to Tootsie Roll Industries, Inc. were $28,791 and $22,509, respectively, and net earnings per share were $0.40 and $0.31, respectively, an increase of $0.09 per share or 29.0%.
Adjusting for the aforementioned, product cost of goods sold decreased from $509,923 in 2023 to $467,253 in 2024, a decrease of $42,670 or 8.4%. As a percent of net product sales, these adjusted costs decreased from 66.8% in 2023 to 65.3% in 2024, a 1.5 favorable percentage point change.
Adjusting for the aforementioned, product cost of goods sold increased from $467,253 in 2024 to $471,429 in 2025, an increase of $4,176 or 0.9%. As a percent of net product sales, these adjusted costs decreased from 65.3% in 2024 to 65.1% in 2025, a 0.2 favorable percentage point change.
The Company’s Spanish subsidiary (97% owned by the Company) incurred an operating loss of $611 in 2024 compared to its $828 loss in 2023. Company management expects the competitive and business challenges in Spain to continue.
The Company’s Spanish subsidiary (97% owned by the Company) incurred an operating loss of $2,244 in 2025 compared to its $611 loss in 2024. Company management expects the competitive and business challenges in Spain to continue, but is undertaking an in-depth evaluation of the business to ascertain the best course of action for this business.
The above discussed decrease in net product sales was the principal driver of lower adjusted operating earnings in 2024 compared to 2023. ​ 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 $26,366 in 2024 compared to $18,066 in 2023, an increase of $8,300.
The above discussed increase in net product sales, as well as cost and expense reduction programs and actions, were the principal drivers of higher adjusted operating earnings in 2025 compared to 2024. ​ 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 $36,297 in 2025 compared to $26,366 in 2024, an increase of $9,931.
The Company does not defer the recognition of any amounts on its consolidated balance sheet with respect to such costs. The expected cost of future payments to customers for incentives and other trade promotional programs is recorded at the time sale as a reduction of Net product sales.
The expected cost of future payments to customers for incentives and other trade promotional programs is recorded at the time sale as a reduction of Net Product Sales.
Periodically, the Company considers possible acquisitions, and if the Company were to pursue and complete such an acquisition, that could result in bank borrowings or other financing. ​ RESULTS OF OPERATIONS ​ 2024 vs. 2023 ​ The consolidated net product sales for the twelve months of 2024 were $715,530 compared to the twelve months 2023 of $763,252, a decrease of $47,722 or 6.3%.
The Company is continuously alert to possible acquisitions, and if the Company were to pursue and complete such an acquisition, that could result in the sale of marketable securities held for investment, bank borrowings or other financing. ​ RESULTS OF OPERATIONS ​ 2025 vs. 2024 ​ The consolidated net product sales for the twelve months of 2025 were $724,675 compared to the twelve months 2024 of $715,530, an increase of $9,145 or 1.3%.
The number of current active employee Plan participants as of January 1, 2023 fell 1% from the previous year and 6% over the past two years.
The number of current active employee Plan participants as of the most recent measurement increased 2% from the previous year and remained consistent over the past two years.
The $22,560 increase in cash flows from operating activities from 2022 to 2023 primarily reflects increases net earnings during 2023, lower inventories, and changes in deferred income taxes including the write-off of deferred tax assets relating to deferred compensation as discussed above. ​ The Company manages and controls a VEBA trust, to fund the estimated future costs of certain union employee health, welfare and other benefits.
The $44,278 increase in cash flows from operating activities from 2023 to 2024 primarily reflects a lower investment in net working capital as well as lower inventories to better meet demand. ​ The Company manages and controls a VEBA trust, to fund the estimated future costs of certain union employee health, welfare and other benefits.
The adjustment to the deferred tax assets resulted in a non-cash tax charge of $11,010 in fourth quarter 2024.
The adjustment to the deferred tax assets resulted in a non-cash tax charge of $11,010 in fourth quarter 2024. ​ The Company’s effective income tax rates were 27.1% and 48.8% in fourth quarter 2025 and 2024, respectively, and 27.1% and 31.6% in twelve months 2025 and 2024, respectively.
The Company expects that this will take place over the next seven years, however, most of the actual expenditures are expected to occur in 2025 and 2026. Company management believes that the total cost of this expansion, including new machinery, equipment and food processing infrastructure, and warehousing will approximate $100,000.
Company management believes that the total cost of this expansion, including new machinery and equipment, some of which is normal and recurring replacements over the next seven years, food processing infrastructure, and raw materials warehousing will approximate $75,000 to $85,000.
The most recent decrease in the withdrawal liability as advised by the Plan was primarily driven by an increase in the PBGC interest rates used to value a portion of the present value of vested benefits (the Plan uses a blended interest rate assumption). As discussed below, the Plan was granted $3.4 billion in Special Financial Assistance in July 2024.
The most recent increase in the withdrawal liability as advised by the Plan was primarily due to the full present value of vested benefits being valued at the PBGC interest rates, as required for plans that receive Special Financial Assistance, rather than a blended interest rate assumption used in previous years.
The increase in these expenses, as a percentage of net product sales was attributable to lower sales volume in 2024 compared to 2023, primarily due to the impact of employee compensation, that is largely fixed in nature. ​ As outlined in Note 1 to the consolidated financial statements, the Company records revenue from net product sales based on accounting guidance.
The increase in these expenses in 2025, as a percentage of net product sales, was principally driven by increases in advertising and marketing expenses, and higher expenses relating to international operations. ​ As outlined in Note 1 to the consolidated financial statements, the Company records revenue from net product sales based on accounting guidance.
These expenses decreased from $65,465 in 2023 to $57,581 in 2024, a decrease of $7,884 or 12.0%.
These expenses decreased from $57,581 in 2024 to $56,780 in 2025, a decrease of $801 or 1.4%.
The decrease in the twelve months 2024 expense compared to twelve months 2023 reflects the effects of lower sales volumes in twelve months 2024, and corresponding reductions in lower production and labor hours worked. ​ In June 2024, the PBGC announced that it had approved the Plan’s application for Special Financial Assistance under the American Rescue Plan Act of 2021.
The aforementioned expense includes surcharges of $1,160 and $1,174 for twelve months 2025 and 2024, respectively, as required under the amended plan of rehabilitation. ​ In June 2024, the PBGC announced that it had approved the Plan’s application for Special Financial Assistance under the American Rescue Plan Act of 2021.
In 2016, the Company received new notices that the Plan’s trustees adopted an updated Rehabilitation Plan effective January 1, 2016, and all annual notices through 2024 have continued to classify the Plan in the “critical and declining status” category. ​ Based on these updated notices, the Plan’s funded percentage (plan investment assets as a percentage of plan liabilities), as defined, were 47.0%, 49.3%, and 48.5% as of January 1, 2023, 2022, and 2021, respectively (these valuation dates are as of the beginning of each Plan year).
In 2016, the Company received new notices that the Plan’s trustees adopted an updated Rehabilitation Plan effective January 1, 2016, and all annual notices through 2024, prior to receipt of Special Financial Assistance, have continued to classify the Plan in the “critical and declining status” category.
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 this status has continued.
Beginning in 2015, the Plan was reclassified to “critical and declining status”, as defined by the PPA and PBGC, for the plan year beginning January 1, 2015. A designation of “critical and declining status” implies that the Plan is expected to become insolvent in the next 20 years.
Fourth quarter 2024 net product sales were $191,356 compared to $195,368 in fourth quarter 2023, a decrease of $4,012, or 2.1%. The sales decline in fourth quarter and twelve months 2024 was driven primarily by lower sales volumes.
Fourth quarter 2025 net product sales were $194,350 compared to $191,356 in fourth quarter 2024, an increase of $2,994, or 1.6%. The sales increase in fourth quarter and twelve months 2025 was driven primarily by price increases taken during the year, as well as successful marketing and sales programs.

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