Tupperware Brands Reports First Quarter 2009 Results; Sales Trend Strengthened Through the Quarter; Raises Earnings Guidance
– First Quarter GAAP diluted E.P.S.
– First Quarter Sales up 1% in local currency, on improving trend through the quarter, and down 15% with negative foreign exchange impact
Chairman and CEO,
Diluted GAAP earnings per share of
“Even with sales only up 1% in local currency, we were able to exceed our earnings per share guidance through managing our expenses and investments in a way that continued to support our business. The savings came from procurement and containing expenses in the back end of the business as our management teams around the world work together to achieve our profitability and cash flow goals while at the same time focusing on driving sales growth,” said
* See Non-GAAP Financial Measures Reconciliation Schedule.
Tupperware Brands will conduct a conference call tomorrow,
First Quarter Segment Highlights*
Tupperware Segments
In
Tupperware North America sales were down 2% in local currency (down 13% reported) versus prior year and included a high single digit increase in
Beauty Segments
Beauty
Beauty Other sales were up 7% in local currency (down 10% reported) with most of the local currency increase coming from
*Amounts discussed in Segment Highlights are on a GAAP basis and include purchase accounting amortization. See Non-GAAP Financial Measures Reconciliation Schedule for information excluding this item.
Second Quarter 2009 Outlook
The second quarter sales outlook is for an increase of 2 to 4% in local currency. Factoring in a negative impact from currency of 16%, sales in dollars are expected to decrease by 12 to 14%. GAAP diluted earnings per share is expected to be
Full Year 2009 Outlook
Full year 2009 sales are expected to increase in local currency versus 2008 by 2 to 5%. Based on current foreign exchange rates there is a 13 percentage point negative impact on the comparison, resulting in a GAAP sales decrease of 8 to 11%. The local currency sales increase includes a high single digit increase from businesses in the emerging markets and sales about even to down slightly versus last year in the established market businesses. Earnings per share on both a GAAP basis and excluding items impacting comparability is expected to be
“Our management teams around the world are smart, empowered and focused on growing their businesses even in these challenging economic times. As we saw in our first quarter results while some businesses were down others were up, once again showing the benefit of being a global portfolio of direct selling companies.”
*2008 Basic and Diluted earnings per share has been recast to conform with FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities. This guidance was adopted in the first quarter of 2009 and reduced 2008 full year diluted earnings per share by
**See Non-GAAP Financial Measures Outlook Reconciliation Schedule.
Tupperware Brands Corporation is a portfolio of global direct selling companies, selling premium innovative products across multiple brands and categories through an independent sales force of 2.3 million. Product brands and categories include design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware brand and beauty and personal care products for consumers through the Armand Dupree, Avroy Shlain, BeautiControl, Fuller Cosmetics, NaturCare, Nutrimetics, Nuvo and Swissgarde brands.
The Company’s stock is listed on the New York Stock Exchange (NYSE: TUP). Statements contained in this release, which are not historical fact and use predictive words such as “outlook”, “expects” or “target” are forward-looking statements. These statements involve risks and uncertainties which include recruiting and activity of the Company’s independent sales forces, the success of new product introductions and promotional programs, the ability to obtain all government approvals on land sales, the success of buyers in obtaining financing or attracting tenants for commercial and residential developments, the effects of economic and political conditions generally and foreign exchange risk in particular and other risks detailed in the Company’s most recent periodic report as filed in accordance with the Securities Exchange Act of 1934. The Company does not intend to update forward-looking information other than through its quarterly earnings releases unless it expects diluted earnings per share for the current quarter, excluding adjustment items, to be significantly below its previous guidance.
Non-GAAP Financial Measures
The Company has utilized non-GAAP financial measures in this release, which are provided to assist readers’ understanding of the Company’s results of operations. The adjustment items materially impact the comparability of the Company’s results of operations. The adjusted information is intended to be more indicative of Tupperware Brands’ primary operations, and to assist readers in evaluating performance and analyzing trends across periods.
The non-GAAP financial measures exclude gains from the sale of property, plant and equipment and insurance settlements; re-engineering costs; purchase accounting intangible asset amortization; and purchase accounting intangible asset and goodwill impairment costs. While the Company is engaged in a multi-year program to sell land adjacent to its
The Company has also elected to present financial measures excluding the impact of amortizing the purchase accounting carrying value of certain definite-lived intangible assets, primarily the value of independent sales forces, recorded in connection with the Company’s
Included on the Company’s website at http://ir.tupperwarebrands.com/history.cfm is information detailing the calculation of the Company’s financial covenants for the most recent period, under its Credit Agreement dated
TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
13 Weeks Ended 13 Weeks Ended
March 28, March 29,
(In millions, except per share data) 2009 2008
---- ----
Net sales $462.8 $543.4
Cost of products sold 160.1 194.8
----- -----
Gross margin 302.7 348.6
Delivery, sales and administrative expense 258.8 297.8
Re-engineering and impairment charges 2.7 2.2
--- ---
Operating income 41.2 48.6
Interest income 0.7 1.1
Interest expense 8.1 8.7
Other expense 1.5 1.4
--- ---
Income before income taxes 32.3 39.6
Provision for income taxes 6.7 7.5
--- ---
Net income $25.6 $32.1
===== =====
Net income per common share:
Basic earnings per share: $0.41 $0.52
Diluted earnings per share: $0.41 $0.51
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Amounts in millions, except per share)
13 13
Weeks Weeks
Ended Ended Foreign
March March Reported Restated Exchange
28, 29, % % %
2009 2008 Inc (Dec) Inc (Dec) Impact
----- ----- ----------- ----------- --------
Net Sales:
------------
Europe $181.1 $220.2 (18) - $(38.7)
Asia
Pacific 71.9 70.2 2 13 (6.6)
TW North
America 60.3 69.5 (13) (2) (8.0)
Beauty North
America 87.4 114.7 (24) (7) (20.4)
Beauty
Other 62.1 68.8 (10) 7 (10.6)
---- ---- -----
$462.8 $543.4 (15) 1 $(84.3)
====== ====== ======
Segment
profit
(loss):
----------
Europe $30.8 $38.1 (19) - $(7.1)
Asia
Pacific 10.0 9.9 1 22 (1.8)
TW North
America 2.0 3.0 (33) (22) (0.4)
Beauty North
America 9.6 14.4 (33) (6) (4.2)
Beauty
Other 2.8 (5.6) - - 0.8
--- ---- ---
55.2 59.8 (8) 17 $(12.7)
======
Unallocated
expenses (12.9) (10.4) 24
Re-engineering
and
impairment
charges (2.7) (2.2) 25
Interest
expense,
net (7.3) (7.6) (4)
---- ----
Income before
taxes 32.3 39.6 (19)
Provision for
income
taxes 6.7 7.5 (10)
--- ---
Net income $25.6 $32.1 (20)
===== =====
Net income
per common
share
(diluted) $0.41 $0.51 (20)
Weighted
Average
number of
diluted
shares 62.5 63.4
TUPPERWARE BRANDS CORPORATION
RECONCILIATION
(In millions
except per share
data)
13 Weeks 13 Weeks
Ended March 28, 2009 Ended March 29, 2008
Excl
Reported Adj's Adj's Reported Adj's Excl Adj's
-------- ------- ----- -------- ------- ----------
Segment
profit
(loss)
Europe $30.8 $0.1 a $30.9 $38.1 $0.1 a $38.2
Asia Pacific 10.0 0.3 a 10.3 9.9 0.4 a 10.3
TW North
America 2.0 2.0 3.0 3.0
Beauty
North
America 9.6 0.4 a 10.0 14.4 0.9 a 15.3
Beauty Other 2.8 0.4 a 3.2 (5.6) 0.9 a (4.7)
--- --- --- ---- --- ----
55.2 1.2 56.4 59.8 2.3 62.1
---- --- ---- ---- --- ----
Unallocated
expenses (12.9) (12.9) (10.4) (10.4)
Re-eng and
impairment
chgs (2.7) 2.7 b - (2.2) 2.2 b -
Interest
expense,
net (7.3) (7.3) (7.6) (7.6)
---- --- ---- ---- --- ----
Income
before
taxes 32.3 3.9 36.2 39.6 4.5 44.1
Provision for
income taxes 6.7 1.3 c 8.0 7.5 1.2 c 8.7
--- --- --- --- --- ---
Net income $25.6 $2.6 $28.2 $32.1 $3.3 $35.4
===== ==== ===== ===== ==== =====
----- ----- ----- ----- ----- -----
Net income per
common share
(diluted) $0.41 $0.04 $0.45 $0.51 $0.05 $0.56
===== ===== ===== ===== ===== =====
(a) Amortization of intangibles of acquired beauty units.
(b) Includes in 2009, $0.2 million related to relocation of BeautiControl
manufacturing facility and $2.5 million related to severance costs
incurred to reduce headcount in the Company's BeautiControl, Australia,
Mexico, and Argentina operations. In 2008, $0.3 million related to the
relocation of the Company's Belgium and BeautiControl manufacturing
facilities, $0.5 million to impairment charges for obsolete software in
the South Africa Beauty Business, and $1.4 million to severance costs
incurred to reduce headcount in the Company's Belgium, Italy, Mexico,
Malaysia, Netherlands and Philippines operations.
(c) Provision for income taxes represents the net tax impact of adjusted
amounts.
See information regarding non-GAAP financial measures in the attached
press release.
TUPPERWARE BRANDS CORPORATION
NON-GAAP FINANCIAL MEASURES OUTLOOK RECONCILIATION SCHEDULE
April 21, 2009
($ in millions, except per share amounts)
Full Year Full Year
2008 Actual 2009 Outlook
----------- ------------
Range
Low High
--- ----
Income before income taxes $201.9 $174.5 $182.5
--------------------------------- --- ---
% change from prior year -14% -10%
--------------------------------- --- ---
Income tax $40.5 $38.5 $40.4
Effective Rate 20% 22% 22%
Net Income (GAAP) $161.4 $136.0 $142.1
--------------------------------- --- ---
% change from prior year -16% -12%
--------------------------------- --- ---
Adjustments(1):
Gains on disposal of assets including
insurance recoveries $(24.9) $(8.8) $(8.8)
Re-engineering and other
restructuring costs 11.9 3.7 3.7
Acquired intangible asset
amortization 9.0 4.8 4.8
Purchase accounting intangible
impairment 9.0 - -
Income tax (2) 3.3 0.3 0.3
--- --- ---
Net Income (Adjusted) $169.7 $136.0 $142.1
--------------------------------- --- ---
% change from prior year -20% -16%
--------------------------------- --- ---
Exchange rate impact (3) (37.7) - -
----- --- ---
Net Income (Adjusted and 2008 Restated
for currency changes) $132.0 $136.0 $142.1
--------------------------------- --- ---
% change from prior year 3% 8%
--------------------------------- --- ---
Net income (GAAP) per common share (diluted) $2.55 $2.16 $2.26
Net Income (Adjusted) per common share
(diluted) $2.68 $2.16 $2.26
Average number of diluted shares (millions) 63.4* 63.0 63.0
==== ==== ====
(1) Refer to Non-GAAP Financial Measures section of attached release
for description of the general nature of adjustment items
(2) Represents income tax impact of adjustments
(3) 2008 restated at current currency exchange rates
* Basic and Diluted earnings per share has been recast to conform
with FASB Staff Position EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions are Participating Securities.
This guidance was adopted as of the beginning of 2009 and reduced full
year diluted earnings per share by $0.01 versus the originally reported
amount.
TUPPERWARE BRANDS CORPORATION
NON-GAAP FINANCIAL MEASURES OUTLOOK RECONCILIATION SCHEDULE
April 21, 2009
($ in millions, except per share amounts)
Second
Second Quarter Quarter
2008 Actual 2009 Outlook
----------- ------------
Range
Low High
--- ----
Income before income taxes $46.2 $50.2 $54.6
--------------------------------- ----- -----
% change from prior year 9% 18%
--------------------------------- --- ---
Income tax $10.2 $11.5 $12.7
Effective Rate 22% 23% 23%
Net Income (GAAP) $35.9 $38.7 $41.9
--------------------------------- ----- -----
% change from prior year 8% 17%
--------------------------------- --- ---
Adjustments(1):
Gains on disposal of assets including
insurance recoveries (0.6) (7.3) (7.3)
Re-engineering and other restructuring
costs 3.5 0.8 0.8
Acquired intangible asset amortization 2.4 1.2 1.2
Purchase accounting intangible impairment 9.0 - -
Income tax (2) (2.4) 1.9 1.9
---- --- ---
Net Income (Adjusted) $47.8 $35.3 $38.5
--------------------------------- --- ---
% change from prior year -26% -19%
--------------------------------- --- ---
Exchange rate impact (3) (14.1) - -
----- --- ---
Net Income (Adjusted and 2008 Restated for
currency changes) $33.7 $35.3 $38.5
--------------------------------- - --
% change from prior year 5% 14%
--------------------------------- --- ---
Net income (GAAP) per common share (diluted) $0.56 $0.62 $0.67
Net Income (Adjusted) per common share (diluted) $0.75 $0.57 $0.62
Average number of diluted shares (millions) 63.9* 62.4 62.4
==== ==== ====
(1) Refer to Non-GAAP Financial Measures section of attached release for
description of the general nature of adjustment items
(2) Represents income tax impact of adjustments (3) 2008 restated at current currency exchange rates
* Earnings per share has been recast to conform with FASB Staff Position
EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
Payment Transactions are Participating Securities. This guidance was
adopted as of the beginning of 2009 and has increased the number of
shares; however, due to the small amount of the change, there was no
impact on 2008 second quarter diluted earnings per share.
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
Mar. 28 Dec. 27,
(In millions) 2009 2008
---- ----
Assets
Cash and cash equivalents $91.4 $124.8
Other current assets 569.5 579.0
----- -----
Total current assets 660.9 703.8
----- -----
Property, plant and equipment, net 236.9 245.4
Other assets 831.7 866.4
----- -----
Total assets $1,729.5 $1,815.6
======== ========
Liabilities and Shareholders' Equity
Short-term borrowings and current
portion of long-term debt $16.8 $3.8
Accounts payable and other current liabilities 375.1 447.7
----- -----
Total current liabilities 391.9 451.5
----- -----
Long-term debt 564.8 567.4
Other liabilities 315.3 322.7
Total shareholders' equity 457.5 474.0
----- -----
Total liabilities and shareholders' equity $1,729.5 $1,815.6
======== ========
Total Debt to Capital Ratio 56% at March 2009 and 55% at December 2008
Capital is defined as total debt plus shareholders' equity
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
13 weeks ended 13 weeks ended
March 28, March 29,
(In millions) 2009 2008
-------------- --------------
OPERATING ACTIVITIES
Net cash used
in operating
activities $(22.1) $(48.0)
INVESTING ACTIVITIES
Capital expenditures (11.0) (11.0)
Proceeds from disposal
of property, plant &
equipment 1.7 1.2
Proceeds from insurance
recoveries - 6.4
--- ---
Net cash used
in investing
activities (9.3) (3.4)
---- ----
FINANCING ACTIVITIES
Dividend payments
to shareholders (13.6) (13.5)
Repurchase of
common stock - (7.3)
Net proceeds from
issuance of term debt - -
Repayment of long-
term debt and capital
lease obligations (0.4) (1.1)
Net change in short-term
debt 11.6 46.5
Other, net 0.9 7.2
--- ---
Net cash (used in)
provided by financing
activities (1.5) 31.8
---- ----
Effect of exchange rate
changes on cash and
cash equivalents (0.5) 3.4
---- ---
Net change in cash
and cash equivalents (33.4) (16.2)
Cash and cash equivalents
at beginning of year 124.8 102.7
----- -----
Cash and cash equivalents
at end of period $91.4 $86.5
===== =====
TUPPERWARE BRANDS CORPORATION
SUPPLEMENTAL INFORMATION
First Quarter Ended March 28, 2009
Sales Force Statistics (a):
Segment AVG. ACTIVE % CHG. TOTAL % CHG.
----------- ------ ----- ------
Europe 115,279 9 512,426 13
Asia Pacific 48,912 27 365,635 15
TW North America 77,216 5 242,466 10
------ -------
Tupperware 241,407 11 1,120,527 13
Beauty North America 333,711 (3) 632,279 -
Beauty Other 222,821 (7) 554,913 5
------- -------
Beauty 556,532 (5) 1,187,192 2
------- ---------
Total 797,939 - 2,307,719 7
======= =========
(a) As collected by the Company and provided by distributors and sales
force.
SOURCE Tupperware Brands Corporation