Tootsie Roll Industries Inc. (NYSE:TR), a confectionery company with a market capitalization of $2.35 billion and strong financial health according to InvestingPro analysis, disclosed on Monday that it expects to incur a non-cash tax charge between $11 million and $12 million in the fourth quarter of 2024. The charge stems from a write-off of deferred tax assets related to the company's nonqualified deferred compensation plans.
The decision, made by the company's Board of Directors on Sunday, December 3, 2024, reverses a previous action from December 28, 2018, which aimed to maintain the full income tax deductibility of certain deferred compensation amounts.
Due to interpretations of the Tax Cuts and Jobs Act by the IRS and growth in plan account balances, the Board found it infeasible to secure tax deductions on all accrued deferred compensation. The company maintains a strong balance sheet with more cash than debt, and its current ratio of 3.59 indicates robust liquidity.
The anticipated charge will be reflected in Tootsie Roll's annual report on Form 10-K for the fiscal year 2024. The company clarified that this write-off would not result in future cash expenditures, although it will affect the company's ability to deduct certain deferred compensation payments against future taxable income.
This report contains forward-looking statements and cautions that actual results may differ materially from projections due to various factors. Tootsie Roll Industries, based in Chicago, Illinois, is known for its confectionery products and operates under the SIC code for Sugar & Confectionery Products.
The information in this article is based on a press release statement from the company and is intended to inform shareholders and the public of the recent financial developments within Tootsie Roll Industries Inc.
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