Tupperware Brands Reports First Quarter Earnings
Ahead of Expectations and Raises Full-Year Outlook
ORLANDO, Fla., April 25 /PRNewswire-FirstCall/ -- Tupperware Brands (NYSE:
TUP) today reported first quarter 2007 results as follows:
First Quarter Summary
o Sales up 8% as reported and 5% in local currency to $456.9 million
o Tupperware segments were up 5% in local currency
o Beauty segments were up 6% in local currency
o EPS of 32 cents
o EPS after adjustments of 36 cents, vs. guidance of 27-32 cents (see
detail in the Non-GAAP Financial Measures Reconciliation Schedule)
"We are pleased we achieved mid-single digit local currency sales growth
in both beauty segments along with a 35% increase in our key Tupperware emerging
markets," said Rick Goings, Chairman and CEO. "Together with the key emerging
markets, significant increases in our established Tupperware markets in the
United States, Japan, Australia and South Africa from enhanced sales force
leadership programs, products and selling situations outweighed continued weak
performance in Germany," Goings continued.
Tupperware Brands will conduct a conference call tomorrow, Thursday, April
26, at 10:00 a.m. Eastern time. The conference call will be webcast and
archived, along with a copy of this news release, at www.tupperwarebrands.com.
First Quarter Highlights
In conjunction with the appointment of Simon Hemus as President and COO as
of January 1, 2007, which resulted in a realignment of the reporting segments,
the Company now has a Beauty North America segment composed of Fuller Mexico and
BeautiControl North America. All other units previously reported in the
International Beauty segment are now reported as a segment called Beauty Other.
Previously reported information has been reclassified to reflect this change.
Tupperware Brand Segments
Both the Asia Pacific and Tupperware North America segments had sales
increases over last year as reported and in local currency. There were
particularly strong increases in Japan, Malaysia and the United States. In
addition, the emerging markets of China, India, and Indonesia were up 21% in
local currency.
Sales in Europe were buoyed by continued growth in South Africa and the
key emerging markets in this segment, which were up 44% in local currency. This
sales growth was offset by Germany where the average active sales force
continued to be below last year. Sales in Europe, excluding Germany, were up 10%
in local currency.
Profit increases in Asia Pacific and North America offset a European
decline, primarily from Germany, for a total increase in local currency profit
of 5% by the Tupperware segments.
Beauty Segments
Sales were up in both beauty segments primarily due to Fuller Mexico and
Central and South America. Profit in the beauty segments was down as a result of
higher manufacturing, commission and sales force training costs in BeautiControl
North America and the timing of expenses in Fuller Mexico.
Outlook
"Continued progress this quarter evidenced by achieving the high end of
our sales expectations, indicates that we have entered a new era whereby our
having a global portfolio of direct selling companies gives us more growth
opportunities as well as makes our business more predictable," said Rick Goings,
Chairman and CEO.
2007 Full Year
o Sales up 3-5% in local currency to $1.85 - $1.87 billion, including
about $46.0 million in positive foreign exchange
o EPS of $1.69 to $1.74 vs. 1.54 last year and previous guidance range
of $1.56 - $1.61, including:
o $6.2 million after tax land and insurance gains
o $6.0 million after tax re-engineering expenses
o $9.2 million after tax intangible asset amortization
o EPS of $1.84 to $1.89 vs. $1.79 last year and previous guidance
range of $1.74 - $1.79, excluding re-engineering costs, intangible
asset amortization and land and insurance gains:
o 13-15 cents positive foreign exchange (9 cents higher than
January)
o About 9 cents lower interest expense at $44 million vs.
previous expectation of $52 million
o 5 cents dilution from more shares vs. no dilution assumed in
previous guidance
o Unallocated costs of $35-37 million
o Significantly higher effective tax rate versus 2006, in the
low- 20% range
Segment Outlook
Tupperware Asia Pacific and North America local currency sales are
expected to increase in the high-single digit percentage range with a small
increase in return on sales in Asia Pacific, versus 16% in 2006, and a mid-
single digit return on sales in North America.
In Europe, the 2007 full-year sales outlook is for local currency sales
and profit to be about even with 2006.
Sales by the beauty segments are expected to increase by about 7% with a
small decrease in return on sales versus 2006 in Beauty North America and
about breakeven in Beauty Other.
2007 Second Quarter
-- Sales up 3-5% in local currency to $467 - $476 million, including
about $15.0 million in positive foreign exchange
-- EPS of 42 to 47 cents vs. 41 cents last year including:
-- $1.2 million after tax land gains
-- $1.0 million after tax re-engineering
-- $2.3 million after tax intangible asset amortization
-- EPS of 45 to 50 cents vs. 49 cents last year, excluding re-
engineering costs, intangible asset amortization and land gains:
-- 4-6 cents from positive foreign exchange vs. 2006
-- 1 cent dilution from increased average diluted shares
outstanding
Tupperware Brands Corporation is a global direct seller of premium,
innovative products across multiple brands and categories through an independent
sales force of 1.9 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
Avroy Shlain, BeautiControl, Fuller, 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" 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 attracting tenants for
commercial 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 regularly update
forward-looking information.
Non-GAAP Financial Measures
The Company has utilized non-GAAP financial measures in this release,
which are provided to assist in investors' 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
investors in evaluating performance and analyzing trends across periods.
The non-GAAP financial measures exclude land sale and insurance gains and
re-engineering costs. While the Company is engaged in a multi-year program to
sell land adjacent to its Orlando Florida headquarters, and also disposes of
other excess land and facilities periodically, these activities are not part of
the Company's primary business operation. Additionally, the gains recognized in
any given period are not indicative of gains which may be recognized in any
particular future period. For this reason, these gains are excluded as
indicated. Further, the Company excludes charges related to casualty losses
caused by significant weather events, fires or similar circumstances. It also
excludes any related gains resulting from the settlement of associated insurance
claims. While these types of events can and do recur periodically, they are
excluded from indicated financial information due to their distinction from
ongoing business operations, inherent volatility and impact on the comparability
of earnings across quarters. Also, the Company periodically records exit costs
as defined under Statement of Financial Accounting Standards No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities" and other
amounts related to rationalizing manufacturing and other re-engineering
activities, and believes these amounts are similarly volatile and impact the
comparability of earnings across quarters. Therefore, they are also excluded
from indicated financial information to provide what the Company believes
represents a more useful measure for analysis and predictive purposes. The
Company has also elected to present financial measures excluding the impact of
amortizing the purchase accounting write-up of the carrying value of depreciable
assets and certain definite-lived intangible assets, primarily the value of
independent sales forces, recorded in connection with the Company's December
2005 acquisition of the direct selling businesses of Sara Lee Corporation. The
amortization expense related to these assets will continue for several years;
however, based on the Company's current estimates, this amortization will
decline significantly as the years progress. As such, the Company believes that
these non-cash charges will not be representative in any single year of amounts
recorded in prior years or expected to be recorded in future years. Therefore,
they are excluded from indicated financial information to also provide a more
useful measure for analysis and predictive purposes.
TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
13 Weeks Ended 13 Weeks Ended
(In millions, except per share data) March 31, 2007 April 1, 2006
- ------------------------------------- -------------- --------------
Net sales $456.9 $423.7
Cost of products sold 161.2 148.2
Gross margin 295.7 275.5
Delivery, sales and administrative
expense 257.6 241.2
Re-engineering and impairment charges 2.8 2.1
Gains on disposal of assets 2.5 --
Operating income 37.8 32.2
Interest income 1.1 2.3
Interest expense 11.8 13.2
Other expense 0.9 0.5
Income before income taxes 26.2 20.8
Provision for income taxes 6.6 4.8
Net income $ 19.6 $ 16.0
Net income per common share:
Basic earnings per share: $ 0.33 $ 0.27
Diluted earnings per share: $ 0.32 $ 0.26
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Amounts in millions, except per share)
13 Weeks 13 Weeks
Ended Ended Reported Restated Foreign
March 31, April 1, % % Exchange
2007 2006* Inc(Dec) Inc(Dec) Impact
--------- -------- -------- -------- --------
SALES
Europe 178.4 168.8 6 (1) 10.9
Asia Pacific 56.6 47.0 20 17 1.3
TW North America 62.6 56.7 10 12 (1.0)
Beauty North America 104.2 101.6 2 6 (3.0)
Beauty Other 55.1 49.6 11 6 2.5
456.9 423.7 8 5 10.7
SEGMENT PROFIT (LOSS)
Europe 28.8 29.8 (4) (9) 1.9
Asia Pacific 6.0 3.5 71 55 0.4
TW North America 1.2 (2.0) + + --
Beauty North America 13.9 14.5 (5) -- (0.6)
Beauty Other (3.7) (4.3) (16) (17) (0.1)
46.2 41.5 11 7 1.6
Unallocated expenses (9.0) (7.7) 16
Other income 2.5 -- +
Re-engineering and
impairment charges (2.8) (2.1) 31
Interest expense, net (10.7) (10.9) (2)
Income before taxes 26.2 20.8 26
Provision for income taxes 6.6 4.8 37
Net income 19.6 16.0 23
Net income per common
share (diluted) 0.32 0.26 23
Average number of
diluted shares 61.9 61.4
* Prior period data has been reclassified to conform with current year
presentation.
TUPPERWARE BRANDS CORPORATION
RECONCILIATION
(In millions except per share data)
13 Weeks Ended 13 Weeks Ended
March 31, 2007 April 1, 2006
------------------------------ ------------------------------
Reported Adj's Excl Adj's Reported Adj's Excl Adj's
-------- ------ ---------- -------- ------ ----------
Segment profit (loss)
Europe $ 28.8 0.3a $ 29.1 $ 29.8 0.5a $ 30.3
Asia Pacific 6.0 0.5a 6.5 3.5 1.0a 4.5
TW North America 1.2 1.2 (2.0) (2.0)
Beauty North America 13.9 1.5a 15.4 14.5 2.8a 17.3
Beauty Other (3.7) 1.0a (2.7) (4.3) 1.8a (2.5)
46.2 3.3 49.5 41.5 6.1 47.6
Unallocated expenses (9.0) (9.0) (7.7) (7.7)
Other income 2.5 (2.5)b -- -- --
Re-eng and impairment
chgs (2.8) 2.8c -- (2.1) 2.1c --
Interest expense,
net (10.7) (10.7) (10.9) (10.9)
Income before taxes 26.2 3.6 29.8 20.8 8.2 29.0
Provision for income
taxes 6.6 1.1d 7.7 4.8 2.1d 6.9
Net income $ 19.6 $ 2.5 $ 22.1 $ 16.0 $ 6.1 $ 22.1
Net income per
common share
(diluted) $ 0.32 $ 0.04 $ 0.36 $ 0.26 $0.10 $ 0.36
(a) Amortization of intangibles of acquired beauty units.
(b) Gain related to insurance recovery from 2006 fire at a former
manufacturing facility in Tennessee.
(c) Includes $1.8 million related to the relocation of the Company's
BeautiControl manufacturing facility, $0.5 million for impairment charges
related to facilities in Japan and Philippines, and $0.5 million related
to severance costs incurred to reduce headcount in the Company's Australia
and Mexico operations. In 2006, primarily related to severance costs
incurred to reduce headcount in the Company's Canada, Belgium and
Philippines operations.
(d) Provision for income taxes represents the net tax impact of adjusted
amounts.
See note regarding non-GAAP financial measures in the attached press
release.
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
Mar. 31, Dec. 31,
(In millions) 2007 2006
- ------------------------------------ -------- --------
Assets
Cash and cash equivalents $ 74.6 $ 102.2
Other current assets 516.1 484.4
Total current assets 590.7 586.6
Property, plant and equipment, net 253.8 256.6
Other assets 868.1 868.9
Total assets $1,712.6 $1,712.1
Liabilities and Shareholders' Equity
Short-term borrowings and current
portion of long-term debt $1.3 $ 0.9
Accounts payable and other current
liabilities 390.6 380.7
Total current liabilities 391.9 381.6
Long-term debt, less current portion 656.2 680.5
Other liabilities 241.0 249.5
Total shareholders' equity 423.5 400.5
Total liabilities and
shareholders' equity $1,712.6 $1,712.1
Total Debt to Capital Ratio 61%
Capital is defined as total debt plus shareholders' equity
TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
13 weeks ended 13 weeks ended
Mar 31, April 1,
(In millions) 2007 2006
- ---------------------------------------------- -------------- --------------
OPERATING ACTIVITIES
Net cash provided by operating activities $ 8.3 $ 4.2
INVESTING ACTIVITIES
Capital expenditures (10.3) (12.4)
Purchase of international beauty businesses -- (79.8)
Proceeds from disposal of property, plant &
equipment 0.8 0.7
Net cash used in investing activities (9.5) (91.5)
FINANCING ACTIVITIES
Dividend payments to shareholders (13.3) (13.3)
Net change in debt (24.9) (10.7)
Other, net 10.6 3.1
Net cash used in financing
activities (27.6) (20.9)
Effect of exchange rate changes on cash and
cash equivalents 1.2 0.9
Net change in cash and cash equivalents (27.6) (107.3)
Cash and cash equivalents at beginning of year 102.2 181.5
Cash and cash equivalents at end of period $ 74.6 $ 74.2
TUPPERWARE BRANDS CORPORATION
SUPPLEMENTAL INFORMATION
First Quarter Ended March 31, 2007
Sales Force Statistics (a):
Segment AVG. ACTIVE % CHG. TOTAL % CHG.
- -------------------- ----------- ------ --------- ------
Europe 108,685 (5) 389,599 13
Asia Pacific 33,124 9 242,577 (7)
TW North America 64,688 2 227,372 (9)
Tupperware 206,497 (1) 859,548 1
Beauty North America 304,802 9 557,738 11
Beauty Other 216,504 (6) 486,431 (4)
Total 727,803 1 1,903,717 2
(a) As collected by the Company and provided by distributors and sales force.
SOURCE Tupperware Brands
- -0- 04/25/2007
/CONTACT: Jane Garrard of Tupperware Brands, +1-407-826-4522/
/Web site: http://www.tupperware.com /