Exhibit 99.1
Tupperware Announces Third Quarter Results
ORLANDO, Fla.--(BUSINESS WIRE)--Oct. 22, 2003--Tupperware
Corporation (NYSE:TUP) announced today for the third quarter ended
September 27, 2003, sales in the third quarter increased two percent
to $249 million compared to $244 million in the prior year. Excluding
foreign currency and the new business model in North America, sales
were down five percent compared to last year.
The third quarter results were breakeven. This is compared to net
income of $8 million or 14 cents per diluted share in the prior year,
which included five cents from gains on land development. The profit
impact of change in the exchange rate for the major currencies has
been mostly eliminated by a translation hedging program in effect
through 2003.
"We are rebuilding the sales force size in our North America
operation and are starting to see some positive recruiting trends.
However, it is expected to take until at least mid 2004 to see
positive comparisons in our US business," said Rick Goings, Chairman
and Chief Executive Officer. "Third quarter results were slightly
better than expected, primarily due to Europe, which continues to have
positive momentum," Goings continued.
The balance sheet improved over the same period last year with a
debt-to-total-capital ratio of 62 percent compared to 72 percent,
which is on track to achieve approximately 55 percent by year end.
Debt declined $70 million to $304 million from $374 million in the
same period of the prior year.
Tupperware will conduct a conference call on Wednesday, October
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
Sales were $102.2 million, up 22 percent over last year. Excluding
foreign currency, sales were up six percent or $5.9 million due to a
sales force size advantage of eight percent and an increase in the
average active sales force of seven percent over prior year.
Profits were $11.1 million compared to $1.8 million last year.
Excluding a $0.8 million positive foreign currency impact, profits
increased $8.5 million compared to the prior year. The sales increase
along with better capacity utilization from higher volume led to these
profits. Additionally, increased sales resulted in volume-driven
efficiencies in promotional expenses.
Fourth quarter sales comparisons will be negatively impacted by
approximately three percent due to prior year business to business
transactions that are not expected to be repeated and the elimination
of UK sales. Excluding these items, due to the eight percent sales
force size advantage, Europe is expected to continue positive momentum
as discussed in the second quarter release although at a more moderate
pace.
North America
Sales were $44.5 million, down 22 percent or $12.3 million
compared to prior year. Excluding the new business model impact of
$4.7 million and foreign currency, sales were down 35 percent due to a
decline in the sales force size of 18 percent and average active sales
force of 32 percent compared to prior year.
The sales decline and lower capacity utilization resulted in a
loss of $6.5 million, down $9.7 million from last year.
Recruiting trends are showing some positive signs; however, it is
anticipated to take at least until mid 2004 to regain a sales force
size advantage that will change sales trends. In the meantime, the US
cost structure is being streamlined through margin improvements and
cost reductions to focus on core business activities with anticipated
savings of $15-20 million in 2004.
Asia Pacific
Sales were $53.7 million, up nine percent or $4.3 million from
last year. Excluding foreign currency, sales increased three percent
or $1.4 from prior year.
Profits were $3.2 million, down $2.4 million from last year.
Excluding the positive impact of foreign currency, profits were down
$3.3 million due to declines in Korea and an unfavorable shift in
product mix in Japan to lower margin items.
The Philippines market is showing sequential improvement with
expectations of positive comparisons in the fourth quarter. Korea
continues to refine a new compensation plan to convert new recruits
into active sellers as recent recruiting has not resulted in
additional sales.
Overall, Asia Pacific is expected to show improvement in operating
results in the second half over the first half of 2003.
Latin America
Overall, Latin America performed as planned with the exception of
some impact from the September flooding in Mexico. Sales were $26.4
million, down 26 percent or $9.4 million compared to the prior year.
Excluding the negative impact of foreign currency, sales were down 21
percent or $7.1 million due to a decrease in the sales force size of
18 percent and average active sales force of 21 percent from last
year.
Profits were $1.0 million, down $2.5 million from prior year.
Excluding foreign currency, profits were down $1.9 million from last
year. Profit declines from sales were partially offset by operating
expense reductions.
Mexico, the primary market in Latin America, was negatively
impacted during September by heavy flooding which impacted about half
of the sales territories. However, those territories not impacted by
flooding performed as anticipated.
Latin America is expected to show sequential improvement in the
fourth quarter.
BeautiControl North America
Sales were $22.4 million, up 23 percent from last year due to
sales force growth of 22 percent and average active sales force growth
of 27 percent compared to prior year.
Profits were $0.4 million, down $1.0 million from last year.
Excluding a one-time benefit in the prior year of $2.3 million related
to the resolution of a pre-acquisition contingency, profits improved
$1.3 million.
Sales momentum for BeautiControl is expected to continue with
anticipation of improving profit margins.
Year to Date
Net income is $20.5 million or 35 cents per diluted share
including one cent from gains on land development. This compares to
$55.6 million or 95 cents per diluted share last year, which included
15 cents from gains on land development and property less
re-engineering costs.
Sales were up six percent from $782 million to $831 million.
Excluding the impact of the North American new business model of $20.5
million and foreign currency, sales were down three percent compared
to the prior year.
Outlook
As indicated in September, full-year expectations are 76 to
81cents per diluted share, including nine 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)
(In millions, except per share data)
13 Weeks Ended Reported Restated Foreign
Sep 27, Sep 28, % % Exchange
2003 2002 Inc (Dec) Inc (Dec) Impact
-----------------------------------------------
SALES
- -----
Europe $102.2 $84.0 22 6 $12.3
Asia Pacific 53.7 49.4 9 3 2.9
Latin America 26.4 35.8 (26) (21) (2.3)
North America (a) 44.5 56.8 (22) (22) 0.4
BeautiControl North
America 22.4 18.3 23 23 -
-------------- -------
$249.2 $244.3 2 (3) $13.3
============== =======
SEGMENT PROFIT (LOSS)
- ---------------------
Europe (b) $11.1 $1.8 + + $0.8
Asia Pacific 3.2 5.6 (42) (50) 0.9
Latin America 1.0 3.5 (72) (66) (0.6)
North America (6.5) 3.2 - - -
BeautiControl North
America 0.4 1.4 (75) (75) -
-------------- -------
9.2 15.5 (41) (45) $1.1
-------------- =======
Unallocated expenses (4.7) (2.9) 61
Translation hedge (1.9) (0.7) +
Other income (c) - 3.6 -
Re-engineering and
impairment charges (d) - - -
Interest expense, net (3.7) (5.5) (33)
--------------
(Loss)/income before
taxes (1.1) 10.0 -
(Benefit from)/provision
for income taxes (1.1) 2.0 -
--------------
Net income $ - $8.0 (100)
==============
Net income per common
share (diluted) $ - $0.14 (100)
==============
Average number of shares 58.5 58.5
==============
39 Weeks Ended Reported Restated Foreign
Sep 27, Sep 28, % % Exchange
2003 2002 Inc (Dec) Inc (Dec) Impact
-----------------------------------------------
SALES
- -----
Europe $372.9 $283.5 32 10 $55.8
Asia Pacific 152.2 146.8 4 (2) 9.3
Latin America 77.1 109.4 (30) (21) (12.1)
North America (a) 161.8 187.7 (14) (14) 1.1
BeautiControl North
America 66.7 54.9 22 22 -
-------------- -------
$830.7 $782.3 6 (1) $54.1
============== =======
SEGMENT PROFIT (LOSS)
- ---------------------
Europe (b) $65.9 $55.4 19 3 8.5
Asia Pacific 10.4 16.8 (38) (45) 2.1
Latin America 1.1 11.1 (90) (88) (1.8)
North America (19.0) 17.2 - - 0.1
BeautiControl North
America 2.0 4.9 (59) (59) -
-------------- -------
60.4 105.4 (43) (47) $8.9
-------------- =======
Unallocated expenses (17.0) (9.4) 81
Translation hedge (9.7) (1.8) +
Other income (c) 1.8 9.4 (81)
Re-engineering and
impairment charges (d) - (17.7) -
Interest expense, net (10.2) (15.9) (36)
--------------
(Loss)/income before
taxes 25.3 70.0 (64)
(Benefit from)/provision
for income taxes 4.8 14.4 (67)
--------------
Net income $20.5 $55.6 (63)
==============
Net income per common
share (diluted) $0.35 $0.95 (63)
==============
Average number of shares 58.4 58.8
==============
(a) The new business model that started in 2001 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 $11.1 and $34.1 million in the third quarter and year-to-date,
respectively. For 2002, this represents an increase in the selling
price of $6.4 and $13.6 million in the third quarter and year-to-date,
respectively.
(b) Europe's segment profit for the year-to-date period in 2002
includes $21.9 million pretax ($14.2 million after tax) of gain on the
sale of the Spanish manufacturing facility.
(c) Other income of $1.8 million pretax ($1.2 million after tax)
year-to-date includes a gain of $1.2 million ($0.7 million after tax)
in the continuation of the Company's program to sell land held for
development near the Company's Orlando, Florida headquarters site and
a $0.6 million ($0.5 million after tax) gain for premiums on options
for the right to put the Company into two interest rate swap
agreements, which expired unexercised . The Company had other income
of approximately $3.6 million ($2.3 million after tax) in the third
quarter of 2002 on land development near its Orlando, Florida
headquarters site. Other income for 2002 of $9.4 million pretax ($5.9
million after tax) for the year-to-date period represents gains 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 $17.7
million pretax ($12.7 million after tax) year-to-date 2002 primarily
relates to costs for severance associated with the consolidation of
European operations and the establishment of regional areas. 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 39 Weeks Ended
Sep 27, Sep 28, Sep 27, Sep 28,
(In millions, except per share data) 2003 2002 2003 2002
---------------------------------
Net sales (a) $249.2 $244.3 $830.7 $782.3
Cost of products sold 88.5 82.8 286.4 257.3
---------------------------------
Gross margin 160.7 161.5 544.3 525.0
Delivery, sales and administrative
expense 156.4 148.6 500.6 451.0
Re-engineering and impairment
charge (b) - - - 17.7
---------------------------------
Operating income 4.3 12.9 43.7 56.3
Interest income 0.4 0.6 1.4 1.7
Other income (c) - 3.6 1.8 31.3
Interest expense 4.1 6.1 11.6 17.6
Other expense 1.7 1.0 10.0 1.7
---------------------------------
(Loss)/income before income taxes (1.1) 10.0 25.3 70.0
(Benefit from)/provision for
income taxes (1.1) 2.0 4.8 14.4
---------------------------------
Net income $ - $8.0 $20.5 $55.6
=================================
Net income per common share:
Basic $ - $0.14 $0.35 $0.96
=================================
Diluted $ - $0.14 $0.35 $0.95
=================================
(a) The new business model that started in 2001 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 $11.1 and $34.1 million in the third quarter and year-to- date,
respectively. For 2002, this represents an increase in the selling
price of $6.4 and $13.6 million in the third quarter and year-to-date,
respectively.
(b) The re-engineering and impairment charge line item of $17.7
million pretax ($12.7 million after tax) year-to-date 2002 primarily
relates to costs for severance associated with the consolidation of
European operations and the establishment of regional areas. It also
included severance and impairment costs related to downsizing of
Japanese and Mexican marketing and manufacturing operations.
(c) Other income of $1.8 million pretax ($1.2 million after tax)
year-to-date includes a gain of $1.2 million ($0.7 million after tax)
in the continuation of the Company's program to sell land held for
development near the Company's Orlando, Florida headquarters site and
a $6 million ($0.5 million after tax) gain for premiums on options for
the right to put the Company into two interest rate swap agreements,
which expired unexercised . The Company had other income of
approximately $3.6 million ($2.3 million after tax) in the third
quarter of 2002 on land development near its Orlando, Florida
headquarters site. Other income for year to date 2002 of $31.3 million
pretax ($20.1 million after tax) represents gains on the sale of the
Spanish manufacturing facility, the Company's convention center and
land held for development near the Company's Orlando, Florida
headquarters site.
TUPPERWARE CORPORATION
CONSOLIDATED BALANCE SHEET
ASSETS
(UNAUDITED)
Sept 27, Dec 28,
(In millions) 2003 2002
----------------
Cash and cash equivalents $15.0 $32.6
Accounts receivable 130.3 139.8
Less allowances for doubtful accounts (26.7) (36.6)
----------------
103.6 103.2
Inventories 170.0 148.2
Deferred income tax benefits 51.4 44.1
Prepaid expenses and other assets 43.4 32.0
----------------
Total current assets 383.4 360.1
----------------
Deferred income tax benefits 134.5 124.8
Property, plant and equipment 1,036.4 981.1
Less accumulated depreciation (816.9) (752.2)
----------------
219.5 228.9
Long-term receivables, net of allowances of
$24.9 million at September 27, 2003 and
$12.4 million at December 28, 2002 43.2 39.6
Goodwill, net of accumulated amortization of
$1.6 million at September 27, 2003 and
December 28, 2002 56.2 56.2
Other assets 20.8 21.0
----------------
Total assets $857.6 $830.6
================
TUPPERWARE CORPORATION
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(UNAUDITED)
Sept 27, Dec 28,
In millions, except per share amounts) 2003 2002
-----------------
Accounts payable $67.7 $89.3
Short-term borrowings and current
portion of long-term debt 38.8 21.2
Accrued liabilities 189.9 172.5
-----------------
Total current liabilities 296.4 283.0
-----------------
Long-term debt 265.5 265.1
Accrued post-retirement benefit cost 36.9 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 22.9 22.8
Subscription receivable (21.2) (21.2)
Retained earnings 516.0 535.3
Treasury stock, 3,930,637 shares at
September 27, 2003 and 4,006,381 shares at
December 28, 2002 at cost (108.1) (110.2)
Unearned portion of restricted stock issued
for future service (0.1) (0.1)
Accumulated other comprehensive loss (226.4) (249.7)
-----------------
Total shareholders' equity 183.7 177.5
-----------------
Total liabilities and shareholders' equity $857.6 $830.6
=================
TUPPERWARE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
39 weeks ended
Sept 27, Sept 28,
(In millions) 2003 2002
-------------------
OPERATING ACTIVITIES
Net income $20.5 $55.6
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 39.7 35.6
Net gain on sale of assets (0.6) (31.1)
Non-cash impact of re-engineering
and impairment charge - 1.3
Changes in assets and liabilities:
Decrease in accounts receivable 5.0 3.4
Increase in inventories (13.6) (14.6)
Decrease in accounts payable and
accrued liabilities (3.7) (25.6)
Decrease in income taxes payable (7.7) (6.9)
(Increase) decrease in net deferred
income taxes (17.2) 4.3
Net cash impact from hedge activity 8.7 (0.8)
Other, net (8.2) 1.5
-------------------
Net cash provided by operating activities 22.9 22.7
-------------------
INVESTING ACTIVITIES
Capital expenditures (26.9) (31.7)
Proceeds from disposal of property, plant &
equipment 4.3 39.2
-------------------
Net cash (used in) provided by investing
activities (22.6) 7.5
-------------------
FINANCING ACTIVITIES
Dividend payments to shareholders (38.5) (38.4)
Proceeds from exercise of stock options 0.9 4.2
Net increase in short-term debt 33.3 1.4
Payment of long-term debt (15.0) -
-------------------
Net cash used in financing activities (19.3) (32.8)
-------------------
Effect of exchange rate changes on cash and
cash equivalents 1.4 1.7
-------------------
Net decrease in cash and cash equivalents (17.6) (0.9)
Cash and cash equivalents at beginning of period 32.6 18.4
-------------------
Cash and cash equivalents at end of period $15.0 $17.5
===================
TUPPERWARE CORPORATION
SUPPLEMENTAL INFORMATION
Third Quarter Ended September 2003
Sales Force Statistics (a):
Segment DIST. % CHG. AVG. % CHG. TOTAL % CHG.
ACTIVE
- ----------------------------------------------------------------------
Europe 695 - 50,731 7 211,249 8
Asia Pacific (b) 656 (6) 42,511 3 341,729 (6)
Latin America 199 (14) 59,070 (21) 303,386 (18)
North America 363 2 15,384 (32) 112,410 (18)
------ ------- -------
Tupperware 1,913 167,696 968,774
BeautiControl N.A. n/a n/a 25,126 27 73,292 22
------ ------- -------
Total (b) 1,913 (3) 192,822 (6) 1,042,066 (7)
====== ======= =========
(a) As collected by the Company and provided by distributors
(b) Sales force statistics in Asia Pacific have evolved to include
individuals that are more customers, than sellers. This quarter these
customer members have been reclassified to improve the sales force to
sales trends relationship. There is no impact on sales. Prior year
amounts reclassified:
From To
--------------------
Asia Pacific
Sales Force 461,396 363,855
Average Active 42,644 41,291
Total
Sales Force 1,223,003 1,125,462
Average Active 206,798 205,445
UNAUDITED SELECTED FINANCIAL DATA THIRD QUARTER 2003
(In millions)
Cash 15.0 Total Debt to Capital Ratio 62%
Net Current Receivables 103.6 Equity 183.7
Net Inventory 170.0 Capital Expenditures 9.5
Short-Term Debt 38.8 Depreciation and Amortization 13.3
Long-Term Debt 265.5
CONTACT: Tupperware Corporation, Orlando
Jane Garrard, 407-826-4522