TOOTSIE ROLL INDUSTRIES INC Segments Disclosure

NOTE 8—SEGMENT AND GEOGRAPHIC INFORMATION:

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The Company uses the management approach to determine segments by evaluating the nature of the Company’s operating activities, the relative significance of operating segments to consolidated results, how management organizes the business, and by evaluating what the Company’s chief operating decision maker “(CODM)” regularly reviews in deciding how to allocate resources and in assessing operating performance. The Company operates and manages an integrated business involved in the manufacture and sale of confectionery products with the overall objective of increasing the volume of sales and profitability of operations. The Company uses similar processes to sell products to similar classes of customers across the entire business.  Certain shipping and handling activities supporting operations are integrated to maximize efficiency and productivity and are regularly reviewed separately by our CODM as a result.  Those shipping and handling costs are included in selling, marketing and administrative expenses and disclosed separately in Note 1 – Significant Accounting Policies.  The Company has determined that it currently has one reportable segment. The Company’s Chief Executive Officer, the Company’s CODM, focuses on consolidated results, specifically consolidated net income (loss), in assessing operating performance and allocating resources.

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Its principal manufacturing operations are located in the United States and Canada, and its principal market is the United States. The Company also manufactures confectionary products in Mexico, primarily for sale in Mexico, and exports products to Canada and other countries worldwide.

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The following geographic data includes net product sales summarized on the basis of the customer location and long-lived assets based on their physical location:

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Sales revenues from Wal-Mart Stores, Inc. aggregated approximately 22.0%, 23.2%, and 22.2% of net product sales during the year ended December 31, 2025, 2024 and 2023, respectively. Sales revenues from Dollar Tree, Inc. (which includes Family Dollar which was acquired by Dollar Tree) aggregated approximately 13.1%, 12.6%, and 14.2% of net product sales during the year ended December 31, 2025, 2024 and 2023, respectively. Some of the aforementioned sales to Wal-Mart and Dollar Tree are sold to McLane Company, a large national grocery wholesaler, which services and delivers certain of the Company’s products to Wal-Mart, Dollar Tree and other retailers in the U.S.A. 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.