Exhibit 99.1
Tupperware Announces Strong Momentum in
Europe Offset by North America Declines in the Second Quarter
ORLANDO, Fla.--(BUSINESS WIRE)--July 22, 2003--Tupperware
Corporation (NYSE:TUP) announced today that second quarter results
were in line with its expectations.
For the second quarter ended June 28, 2003, net income was $14
million or 24 cents per diluted share, including one cent from gains
on land development. This is compared to $32 million or 54 cents per
diluted share in the prior year, which included 11 cents from gains on
land development and property less re-engineering costs. The profit
impact of change in the exchange rate for the major currencies has
been eliminated by a translation hedging program in effect through
2003.
Sales in the second quarter increased eight percent to $310
million compared to $286 million in the prior year. Excluding foreign
currency and the new business model in North America, sales were down
one percent compared to last year.
"While we are pleased with continuing momentum in our European
business, which contributes about half of our profits, it was not
enough to offset steep declines in North America, " said Rick Goings,
Chairman and Chief Executive Officer. "Latin America, Asia Pacific and
BeautiControl are performing as anticipated at the beginning of the
year," Goings continued.
The balance sheet continues to improve with a
debt-to-total-capital ratio of 57 percent compared to 70 percent for
the same period last year, which is on track to achieve a target of
50-55 percent by year end. Debt declined $86 million to $272 million
from $358 million in the prior year.
Tupperware will conduct a conference call on Tuesday, July 22,
2003, at 10:00 am Eastern time. The conference call will be simulcast
and archived, along with a copy of this news release, at
http://www.Tupperware.com.
Segment Highlights
Europe
This segment reported sales of $135 million, up 36 percent over
last year. Excluding foreign currency, sales were up 11 percent,
including a year-over-year increase of $2 million from business to
business sales. This sales momentum is due to continued growth in the
sales force size and activity, which is up eight percent and two
percent respectively from last year.
Profits were $25 million compared to $37 million last year, which
included approximately $21 million related to the gain on sale of a
Spanish manufacturing facility. Excluding this gain and a $3.5 million
positive foreign currency impact, profits increased $6.2 million or 32
percent compared to the prior year.
Current sales force trends bode well for continuing positive
momentum in the second half, although at a more moderate pace than the
first half.
North America
As previously announced, the Target partnership had a significant
effect on party scheduling, attendance and cancellation rates, and
Tupperware will withdraw from the partnership effective September 1.
Declining party activity and a lower sales force size, resulted in
sales being down 15 percent. Excluding the impact of a new business
model, sales declined 26 percent.
The sales decrease along with increased promotional costs resulted
in a segment loss of $4.8 million in the second quarter compared to a
profit of $10.4 million last year.
The decision to terminate the Target relationship has been
positively received by the sales force. However, it will take several
quarters to rebuild momentum in the business and operating results
will be impacted throughout this year. It is anticipated that North
America will, at best, break even in 2003 compared to a $30 million
profit last year.
Asia Pacific
This region performed as expected with a sales increase of six
percent compared to the prior year. Excluding foreign currency, sales
were up one percent due to increased productivity of the sales force.
Although sales force size was down two percent and average active
sales force down 14 percent compared to last year, these trends were
improved from the first quarter.
Profits were down $1.9 million. Excluding foreign currency,
profits were down $2.6 million due to discounting of excess inventory
in Japan and declines in Korea.
The Philippines market showed early signs of stability in both
sales force trends and operating results. While the Korea sales force
size has increased, these trends are not yet reflected in operating
results. Other markets in Asia Pacific are performing as expected and
this area is anticipated to have sequential improvement through the
second half.
Latin America
This segment is performing as expected and has shown sequential
improvement since the fourth quarter of 2002 in both sales and
profits.
Although improving, sales force size and activity declines of 13
percent and 15 percent respectively resulted in sales being down 23
percent compared to the prior year. Excluding foreign currency, sales
were down 15 percent.
These sales resulted in segment profits of $2.1 million, down $2.8
million from last year. Excluding foreign currency, profits were down
$2.4 million.
The sequential improvement is expected to continue through the
second half as comparisons become easier in the fourth quarter.
BeautiControl North America
Sales increased 24 percent due to sales force growth of 24 percent
and average active sales force growth of 19 percent compared to prior
year.
Profits declined $1.7 million from prior year as a result of
promotional spending to build the sales force size.
The current sales force size advantage is expected to lead to
continued improvement in sales. Profits are expected to improve in the
second half as promotional spending declines.
Year to Date
Net income is $21 million or 35 cents per diluted share including
one cent from gains on land development. This compares to $48 million
or 81 cents per diluted share last year, which included ten cents from
gains on land development and property less re-engineering costs.
Sales were up eight percent from $538 million to $581 million.
Excluding foreign currency and North America new business model, sales
were down two percent compared to the prior year.
Outlook
Due to second quarter declines in North America, which are
expected to continue throughout the year, partially offset by positive
momentum in Europe, full-year expectations are reduced to $1.18-$1.26
per diluted share, including 13 to 16 cents from gains on land
development and 10 cents positive impact from foreign currency.
Tupperware Corporation, a $1.1 billion multinational company, is
one of the world's leading direct sellers, supplying premium food
storage, preparation and serving items to consumers in more than 100
countries through its Tupperware brand. In partnership with over a
million independent sales consultants worldwide, Tupperware reaches
consumers through informative and entertaining home parties; retail
access points in malls and other convenient venues; corporate and
sales force Internet web sites; and television shopping. Additionally,
premium beauty and skin care products are brought to customers through
its BeautiControl brand in North America, Latin America and Asia
Pacific. Consumers can access the brands' web sites at
http://www.tupperware.com and http://www.beauticontrol.com.
Tupperware 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 development, 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 report on Form 8-K dated April 10,
2001, as filed with the Securities and Exchange Commission.
TUPPERWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(Dollars in millions, except per share)
13 13 26 26
Weeks Weeks Weeks Weeks
Ended Ended Reported Restated Foreign Ended Ended
Jun 28,Jun 29, % % ExchangeJun 28,Jun 29,
Inc Inc Impact
2003 2002 (Dec) (Dec) 2003 2002
---------------------- -------- ----------------------
SALES
- -----
Europe $135.4 $99.7 36 % 11 % $21.8 $270.7 $199.5
Asia Pacific 59.5 56.0 6 1 2.9 98.5 97.4
Latin America 30.2 39.1 (23) (15) (3.4) 50.7 73.6
North America
(a) 61.6 72.7 (15) (16) 0.5 117.3 130.9
BeautiControl
North America 23.3 18.6 24 24 - 44.3 36.6
-------------- ----------------------
$310.0 $286.1 8 1 $21.8 $581.5 $538.0
============== ======================
SEGMENT PROFIT (LOSS)
- ---------------------
Europe (b) $25.3 $36.7 (31) (37) $3.5 $54.8 $53.6
Asia Pacific 6.1 8.0 (24) (30) 0.7 7.2 11.2
Latin America 2.1 4.9 (58) (54) (0.4) 0.1 7.6
North America (4.8) 10.4 - - - (12.5) 14.0
BeautiControl
North America 0.2 1.9 (89) (89) - 1.6 3.5
-------------- ----------------------
28.9 61.9 (53) (56) $3.8 51.2 89.9
-------------- ========--------------
Unallocated
expenses (6.8) (3.0) + (12.3) (6.5)
Translation hedge (3.6) (1.1) + (7.8) (1.1)
Other income (c) 1.8 5.1 (65) 1.8 5.8
Re-engineering
and impairment
charges (d) - (16.3) - - (17.7)
Interest
expense, net (2.1) (5.7) (63) (6.5) (10.4)
-------------- --------------
Income before
taxes 18.2 40.9 (56) 26.4 60.0
Provision for
income taxes 4.1 8.9 (55) 5.9 12.4
-------------- --------------
Net income $14.1 $32.0 (56) $20.5 $47.6
============== ==============
Net income per
common share
(diluted) $0.24 $0.54 (55) $0.35 $0.81
============== ==============
Average number
of shares 58.4 59.2 58.4 59.0
============== ==============
(Dollars in millions, except per share)
Reported Restated Foreign
% % Exchange
Inc Inc Impact
(Dec) (Dec)
-------- -------- --------
SALES
- -----
Europe 36% 11% $43.5
Asia Pacific 1 (5) 6.4
Latin America (31) (21) (9.8)
North America (a) (10) (11) 0.7
BeautiControl North America 21 21 -
--------
8 - $40.8
========
SEGMENT PROFIT (LOSS)
- ---------------------
Europe (b) 2 (11) $7.7
Asia Pacific (36) (42) 1.3
Latin America (99) (99) (1.2)
North America - - -
BeautiControl North America (53) (53) -
--------
(43) (48) $7.8
========
Unallocated expenses 89
Translation hedge +
Other income (c) (69)
Re-engineering and impairment charges (d) -
Interest expense, net (38)
Income before taxes (56)
Provision for income taxes (53)
Net income (57)
Net income per common share (diluted) (56)
Average number of shares
(a) The new business model that started in 2001 is being phased into
North America and currently has 271 distributors using this model.
The remaining distributors are expected to be completed by the end of
2003. This model results in a higher company sales price that
includes the margin that was previously realized by the distributors
who are now compensated with a commission. For 2003, this represents
an increase in the selling price of $11.0 and $23.0 million in the
second quarter and year-to-date periods, respectively. For 2002,
this represents an increase in the selling price of $4.8 and $7.2
million in the second quarter and year-to-date periods, respectively.
(b) In both the second quarter and year-to-date 2002, Europe includes
$21.9 million gain on the sale of the Spanish manufacturing facility
and $0.8 million of costs related to write-downs of accounts
receivable and inventory arising from the decision to restructure the
Company's United Kingdom operations.
(c) Other income of $1.8 million pretax ($1.2 million after tax)
represents the gain on the sale of land held for development near the
Company's Orlando, Florida headquarters site ($1.2 million pretax and
$0.7 million after tax) and a gain for premiums on options which have
expired unexercised for the right to put the Company into an interest
rate swap agreement ($0.6 million pretax and $0.5 million after tax).
Other income for 2002 of $5.1 million pretax ($3.2 million after
tax) and $5.8 million pretax ($3.6 million after tax) for the second
quarter and year-to-date, respectively, represents the gain on the
sale of the Company's convention center and land held for development
near the Company's Orlando, Florida headquarters site.
(d) The re-engineering and impairment charge line item of $16.3
million pretax ($11.8 million after tax) and $17.7 million pretax
($12.7 million after tax) for the second quarter and year-to-date
2002, respectively, primarily relates to costs for severance
associated with the consolidation of European operations and the
establishment of regional clusters. It also included severance and
impairment costs related to downsizing of Japanese and Mexican
marketing and manufacturing operations.
TUPPERWARE CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
13 Weeks Ended 26 Weeks Ended
Jun 28,Jun 29, Jun 28,Jun 29,
(In millions, except per share data) 2003 2002 2003 2002
-------------- --------------
Sales and other income:
Net Sales (a) $310.0 $286.1 $581.5 $538.0
Other Income (b) 1.8 27.0 1.8 27.7
Interest Income 0.4 0.6 1.0 1.1
-------------- --------------
Total sales and other income $312.2 $313.7 $584.3 $566.8
Costs and expenses :
Cost of products sold 108.6 94.7 197.9 174.5
Delivery, sales and
administrative expense 179.4 155.2 344.2 302.4
Interest expense 2.5 6.3 7.5 11.5
Re-engineering and impairment
charges (c) - 16.3 - 17.7
Other expense 3.5 0.3 8.3 0.7
-------------- --------------
Total costs and expenses 294.0 272.8 557.9 506.8
-------------- --------------
Income before income taxes 18.2 40.9 26.4 60.0
Provision for income taxes 4.1 8.9 5.9 12.4
-------------- --------------
Net income $14.1 $32.0 $20.5 $47.6
============== ==============
Net income per common share:
Basic $0.24 $0.55 $0.35 $0.82
============== ==============
Diluted $0.24 $0.54 $0.35 $0.81
============== ==============
(a) The new business model that started in 2001 is being phased into
North America and currently has 271 distributors using this model.
The remaining distributors are expected to be completed by the end of
2003. This model results in a higher company sales price that
includes the margin that was previously realized by the distributors
who are now compensated with a commission. For 2003, this represents
an increase in the selling price of $11.0 and $23.0 million in the
second quarter and year-to-date, respectively. For 2002, this
represents an increase in the selling price of $4.8 and $7.2 million
in the second quarter and year-to-date, respectively.
(b) Other income of $1.8 million pretax ($1.2 million after tax)
represents the gain on the sale of land held for development near the
Company's Orlando, Florida headquarters site ($1.2 million pretax and
$0.7 million after tax) and a gain for premiums on options which have
expired unexercised for the right to put the Company into an interest
rate swap agreement ($0.6 million pretax and $0.5 million after tax).
Other income for 2002 of $27.0 million pretax ($17.4 million after
tax) and $27.7 million pretax ($17.8 million after tax) for the
second quarter and year-to-date, respectively, represents the gain on
the sale of the Spanish manufacturing facility and the sale of the
Company's convention center and land held for development near the
Company's Orlando, Florida headquarters site.
(c) The re-engineering and impairment charge line item of $16.3
million pretax ($11.8 million after tax) and $17.7 million pretax
($12.7 million after tax) for the second quarter and year-to-date
2002, respectively, primarily relates to costs for severance
associated with the consolidation of European operations and the
establishment of regional clusters. It also included severance and
impairment costs related to downsizing of Japanese and Mexican
marketing and manufacturing operations.
TUPPERWARE CORPORATION
CONSOLIDATED BALANCE SHEET
ASSETS
(UNAUDITED)
June 28, Dec. 28,
(In millions) 2003 2002
----------- ----------
Cash and cash equivalents $ 21.9 $ 32.6
Accounts receivable 132.8 139.8
Less allowances for doubtful accounts (25.8) (36.6)
------------- ------------
107.0 103.2
Inventories 159.4 148.2
Deferred income tax benefits 47.7 44.1
Prepaid expenses and other assets 42.6 32.0
------------- ------------
Total current assets 378.6 360.1
------------- ------------
Deferred income tax benefits 128.2 124.8
Property, plant and equipment 1,037.5 981.1
Less accumulated depreciation (810.6) (752.2)
------------- ------------
226.9 228.9
Long-term receivables, net of allowance of
$25.4 million at June 28, 2003 and
$12.4 million at December 28, 2002 42.6 39.6
Goodwill, net of accumulated amortization
of $1.6 million at June 28, 2003 and
December 28, 2002 56.2 56.2
Other assets 20.9 21.0
------------- ------------
Total assets $ 853.4 $ 830.6
============= ============
TUPPERWARE CORPORATION
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(UNAUDITED)
(Dollars in millions, except per share June 28, Dec. 28,
amounts) 2003 2002
------------ ------------
Accounts payable $ 75.1 $ 89.3
Short-term borrowings and current
portion of long-term debt 6.6 21.2
Accrued liabilities 191.8 172.5
------------ ------------
Total current liabilities 273.5 283.0
------------ ------------
Long-term debt 265.2 265.1
Accrued post-retirement benefit cost 36.2 35.7
Other liabilities 75.1 69.3
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.01 par value,
200,000,000 shares authorized; none issued -
Common stock, $0.01 par value, 600,000,000 -
shares authorized; 62,367,289 shares issued 0.6 0.6
Paid-in Capital 22.8 22.8
Subscription receivable (21.3) (21.2)
Retained earnings 529.0 535.3
Treasury Stock, 3,936,651 shares at
June 28, 2003 and 4,006,381 shares at
December 28, 2002 at cost (108.2) (110.2)
Unearned portion of restricted stock
issued for future service (0.1) (0.1)
Accumulated other comprehensive loss (219.4) (249.7)
------------ ------------
Total shareholders' equity 203.4 177.5
------------ ------------
Total liabilities and shareholders' equity $ 853.4 $ 830.6
============ ============
TUPPERWARE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
26 weeks ended
June 28, June 29,
2003 2002
(In millions) -------- --------
OPERATING ACTIVITIES
Net income $20.5 $47.6
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 26.4 23.6
Net gain on sale of assets (0.6) (27.1)
Non-cash impact of re-engineering
and impairment charge - 1.3
Changes in assets and liabilities:
Decrease in accounts receivable 5.0 8.5
Increase in inventories (0.5) (14.6)
Decrease in accounts payable and
accrued liabilities (0.7) (10.7)
Decrease in income taxes payable (10.3) (9.8)
(Increase) decrease in net
deferred income taxes (5.0) 9.0
Other, net 7.0 (4.3)
-------- --------
Net cash provided by operating
activities 41.8 23.5
-------- --------
INVESTING ACTIVITIES
Capital expenditures (17.4) (18.4)
Proceeds from disposal of property, plant
& equipment 3.0 38.8
-------- --------
Net cash (used in) provided by investing
activities (14.4) 20.4
-------- --------
FINANCING ACTIVITIES
Dividend payments to shareholders (25.7) (25.6)
Proceeds from exercise of stock options 0.9 4.0
Net decrease (increase) in short-term debt 1.2 (17.1)
Payment of long-term debt (15.0) -
-------- --------
Net cash used in financing activities (38.6) (38.7)
-------- --------
Effect of exchange rate changes on cash and
cash equivalents 0.5 2.0
-------- --------
Net (decrease) increase in cash and cash
equivalents (10.7) 7.2
Cash and cash equivalents at
beginning of period 32.6 18.4
-------- --------
Cash and cash equivalents at end of period $21.9 $25.6
======= ========
TUPPERWARE CORPORATION
SUPPLEMENTAL INFORMATION
Second Quarter Ended June 2003
Sales Force Statistics:(i)
Segment DIST. % AVG. % TOTAL %
CHG. ACTIVE CHG. CHG.
---------------------------------------------------------------------
Europe 688 1 58,981 2 211,930 8
Asia Pacific 667 (11) 44,240 (14) 501,357 (2)
Latin America 201 (13) 66,427 (15) 315,424 (13)
North America 361 4 20,698 (12) 123,122 (5)
------ -------- ----------
Tupperware 1,917 190,346 1,151,833
BeautiControl N.A. n/a n/a 24,530 19 66,900 24
------ -------- ----------
Total 1,917 (4)214,876 (7)1,218,733 (3)
====== ======== ==========
(i) As collected by the Company and provided by distributors
UNAUDITED SELECTED FINANCIAL DATA SECOND QUARTER 2003
($ - millions)
Cash 21.9 Total Debt to Capital Ratio 57%
Net Current Receivables 107.0 Equity 203.4
Net Inventory 159.4 Capital Expenditures 10.0
Short-Term Debt 6.6 Depreciation and Amortization 12.9
Long-Term Debt 265.2
CONTACT: Tupperware Corporation, Orlando
Jane Garrard, 407/826-4522
http://www.tupperware.com