- First quarter sales up slightly in U.S. dollars and 7%
in local currency+ versus last year.
- GAAP diluted E.P.S. $1.02, versus $1.06 last year.
Adjusted*, diluted E.P.S. $1.31, up 24% in local currency and 13
cents above high-end of guidance.
- Total sales force count up 6%
year-over-year.
(NYSE:TUP) Tupperware Brands Corporation today announced first
quarter 2014 operating results.
Rick Goings, Chairman and CEO, commented, "In spite of
everything that was going on around the world from challenging
macroeconomic environments to extreme weather conditions, bitter
winter in some markets to drought in Malaysia, we continued to
deliver positive results with first quarter sales at the high end
of our guidance and adjusted EPS well above our high-end. Even
excluding currency movements compared with our January guidance and
a higher than expected increase in sales and profit in Venezuela,
we came in with adjusted EPS above the high end of the outlook we
provided in January with sales in local currency at the low end of
our range. The benefit of our global portfolio of relationship
based businesses moderated the impact of external pressure on any
one market. Once again, the strength of our emerging markets was
able to mitigate the challenges we faced in some of our established
markets as we continued to work through the implementation of
strategies to drive future growth."
Goings continued, "We invested in many of these emerging markets
15+ years ago and are now recognizing the benefit of those
decisions. Our business continues to work especially well in
emerging markets, not only because of their large populations,
growing middle classes, and desire for international quality
brands, but also because of their entrepreneurial spirit. We are
both a brand and a channel with premium products sold through our
2.9 million global sales force to external customers."
First Quarter Executive Summary
- First quarter 2014 net sales were $663 million. Emerging
markets**, accounting for 64% of sales, achieved a 14% increase in
local currency. Established markets were down 4% in local currency,
a 1 percentage point improvement over fourth quarter 2013.
- GAAP net income of $52.2 million versus $58.2 million in the
prior year, which included $12 million pretax more of net expense
"items" primarily related to the impact from amounts on the balance
sheet of the devaluation of the Venezuelan bolivar, was down 10% in
dollars and up 1% in local currency. Adjusted diluted E.P.S. of
$1.31 included 12 cents of negative impact versus 2013 from changes
in foreign exchange rates, which was 2 cents better than included
in January's guidance.
- Cash outflow from operating and investing activities was $29
million, versus an inflow of $5 million in 2013 that included $9
million associated with premiums and accrued interest on the sale
of senior notes, and a much lower outflow from tax payments due to
timing.
- In the first quarter, the Company returned $43 million to
shareholders through a dividend payout of $33 million and the
repurchase of 130 thousand shares for $10 million. Since 2007, 20
million shares have been repurchased for $1.2 billion, with $0.8
billion left under an authorization that runs until February
2017.
- Total sales force of 2.9 million was up 6% versus prior year at
the end of the quarter, with improvement in most markets.
First Quarter Business Highlights
Europe: Solid results in Turkey and low to high teen
increases in both South African businesses, offset by impact of low
activity primarily in established markets and CIS
- Segment sales, down 1% versus last year reported and up 1% in
local currency, a sequential improvement from -2% in local currency
in the fourth quarter of 2013.
- Emerging markets were up 8% in local currency. Primarily driven
by Turkey, up 19%, Tupperware South Africa, up 13% and Avroy Shlain
up 17%, largely offset by CIS, which was down 18% but had a 13
percentage point improvement over the fourth quarter.
- Established markets were down 1% in local currency, a continued
sequential improvement in trend. Germany with a 4% sales force
advantage at the end of the quarter, but lower sales force
productivity, was down 3%, an 11 point improvement over prior
quarter, France's local currency sales were down 6%, reflecting a
poor reception by the sales force to the January promotional
program. Sales trends improved through the remainder of the quarter
and France ended the quarter with a 9% sales force advantage.
Asia Pacific: Indonesia and China sales up double
digits
- Sales for the segment down 2% reported and up 9% in local
currency, driven by the emerging markets up 12% in local currency,
led by China, up 29%, and Indonesia, up 25%. India was down by 14%
and Malaysia/Singapore by 4%. There is a continuing focus on
mitigating macroeconomic factors in India, as well as focusing top
end sales force leaders on recruiting, training and activating
sales force members.
- Established markets in the segment were even with prior year in
local currency, a 3 point improvement over prior quarter, as they
continued to execute strategies to stabilize and improve sales
force and sales force leadership levels.
- Active sales force up 1%. The 8 percentage point
difference between the sales and active seller comparisons was
primarily related to a mix shift toward Indonesia and China that
have a higher average order size than the segment overall.
Tupperware North America: Tupperware Mexico up 12%,
including 6 point benefit from higher B2B sales
- Segment sales, down 2% reported and up 2% in local
currency. Tupperware Mexico sales up 12%, reflected a more
active and productive sales force, as well as higher B2B sales,
which had a 3 percentage point benefit on the sales comparison for
the whole segment.
- Tupperware United States and Canada sales were down 8% in local
currency, and included an estimated 4 point impact from severe
weather. The focus continued on building and strengthening
the sales force structure and leadership levels. Sales force
size closed 2% above the prior year.
Beauty North America: Continued focus on executing and
leveraging recently implemented programs
- Sales for the segment were down 14% reported and 11% in local
currency. Fuller Mexico sales were down 9%, but reflected a 2
point improvement versus prior quarter. Saw slightly improved
sales force activity and productivity towards the end of
quarter. Continued focus on stabilizing and growing the number
of sales managers and total sales force size.
- BeautiControl sales were down 17%. Sales force size
decreased through the quarter due primarily to a less costly and
more substantive recruiting approach. Through engagement of the top
end of the sales force, there is a continuing focus on developing a
larger and more active sales force and executing on the programs in
place.
South America: Continued good recruiting resulted in 17%
sales force increase
- Sales up 24% reported and 47% in local currency, driven by
Brazil and Venezuela. Brazil was up 23% in local currency primarily
by leveraging a larger sales force size. Venezuela was up over
100%, with sales of $32.9 million and profit of $9.2 million in
2014 versus $14.3 million of sales and $2.4 million of profit in
the 2013 quarter, primarily reflecting higher prices due to
inflation and less promotional activity. Venezuela's
operating activity in the quarter was translated at an exchange
rate of 6.3 bolivars to the U.S. dollar. U.S. GAAP results also
included a non-cash pretax charge of $13.4 million from translating
the March balance sheet at an exchange rate of 10.8 bolivars to the
U.S. dollar. Excluding Venezuela, segment sales were up 22% in
local currency.
- Active sales force up 10%. The 37 point difference between
the sales and active seller comparisons primarily reflected the
ongoing strategies to increase average order size in Argentina, and
inflation related price increases throughout the segment.
2014 Outlook (Unaudited)
Based on current business trends and foreign currency rates, the
Company's second quarter and full year 2014 guidance is provided
below.
Company Level
|
|
13 Weeks
Ended |
13 Weeks |
52 Weeks
Ended |
52 Weeks |
|
June 28,
2014 |
Ended |
Dec 27,
2014 |
Ended |
|
Low |
High |
June 29, 2013 |
Low |
High |
Dec 28,
2013 |
USD Sales Growth vs Prior
Year |
(1)% |
1% |
8% |
0% |
2% |
3% |
GAAP EPS |
$1.24 |
$1.29 |
$1.43 |
$4.97 |
$5.12 |
$5.17 |
GAAP Pre-Tax ROS |
12.7% |
12.9% |
14.6% |
12.8% |
12.9% |
13.5% |
|
|
|
|
|
|
|
Local Currency+ Sales Growth vs Prior
Year |
5% |
7% |
8% |
5% |
7% |
6% |
EPS Excluding Items* |
$1.44 |
$1.49 |
$1.46 |
$5.66 |
$5.81 |
$5.43 |
Pre-Tax ROS Excluding
Items |
14.4% |
14.6% |
15.0% |
14.3% |
14.4% |
14.1% |
|
|
|
|
|
|
|
FX Impact on EPS Excluding
Items Comparison (a) |
($0.13) |
($0.13) |
|
($0.38) |
($0.38) |
|
(a) Impact of changes in
foreign currency versus prior year are updated monthly and posted
on:
http://ir.tupperwarebrands.com/foreign-exchange-impact.cfm. |
Full year 2014
- Net interest expense is expected to be around $46 million.
- Tax rate excluding items is expected to be 25%, and 26% on a
U.S. GAAP basis.
- Reflects $185 million full-year open market share repurchases,
of which $10 million is in the second quarter.
- Diluted earnings per share guidance includes for Venezuela
first quarter operating activity translated at 6.3 Bs/$, and
amounts on the balance sheet at the end of March 2014 and operating
activity for the remainder of 2014 translated at 10.8
Bs/$. The pretax expense impact from amounts on the balance
sheet as of the end of March 2014 was $13.4 million in the first
quarter and is expected to be $6.3 million in the second and third
quarters and is included in the U.S. GAAP earnings per share and
return on sales data above but not in the data excluding
items. If a rate of 49 bolivars to the U.S. dollar were used
instead of 10.8, the first quarter 2014 amount would have been $16
million higher and the second and third quarter forecast amount
would have been $7 million higher.
Segment Level
- For the full year, sales in local currency are expected to be
about even in Europe and Tupperware North America, up high-single
to low-double digit in Asia Pacific, down high single digit in
Beauty North America and up close to 30% percent in the South
America segment. Venezuela's forecasted sales increase being
above the segment's average accounts for a high single digit share
of the increase for the segment.
- Pre-tax return on sales without items for the full year, versus
2013, is expected to increase modestly in Europe and Asia Pacific,
to be up about 1 point in Tupperware North America and in South
America, and to decrease a couple of percentage points in Beauty
North America.
* See Non-GAAP Financial Measures Reconciliation Schedules.
** The Company classifies Established Market Units as those
operating in Western Europe (including Scandinavia), the United
States, Canada, Australia and Japan and its remaining units as
Emerging Market Units.
+ Local currency changes are measured by comparing current year
results with those of the prior year translated at the current
year's foreign exchange rates.
First Quarter Earnings Conference Call
Tupperware Brands will conduct a conference call and
simultaneous webcast presentation including slides today,
Wednesday, April 23, 2014, at 10:00 am Eastern time. The
conference call and slides will be webcast and accessible, along
with a copy of this news release, on www.tupperwarebrands.com.
Tupperware Brands Corporation is the leading
global marketer of innovative, premium products across multiple
brands utilizing a relationship based selling method through an
independent sales force of 2.9 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 through the Armand Dupree, Avroy
Shlain, BeautiControl, Fuller Cosmetics, NaturCare, Nutrimetics,
and Nuvo 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 that include recruiting
and activity of the Company's independent sales forces, the success
of new product introductions and promotional programs, governmental
approvals of materials for use in food containers and beauty and
personal care products, changes in the fair value of previously
acquired businesses and trade names, 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 periodic reports as filed in
accordance with the Securities Exchange Act of 1934.
The Company updates each month the impact of changes in foreign
exchange rates versus the prior year, posting it on;
http://ir.tupperwarebrands.com/foreign-exchange-impact.cfm. Other
than updating for changes in foreign currency exchange rates, the
Company does not intend to update forward-looking information,
except through its quarterly earnings releases, unless it expects
diluted earnings per share for the current quarter, excluding items
impacting comparability and the impact of changes in foreign
exchange rates, 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. These amounts, identified as items
impacting comparability, at times materially impact the
comparability of the Company's results of operations. The adjusted
information is intended to be 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 related to
casualty losses, inventory obsolescence in conjunction with
decisions to exit or significantly restructure businesses, asset
retirement obligations, and re-engineering and impairment charges.
Further, 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
operations. Additionally, amounts recognized in any given
period are not indicative of amounts that may be recognized in any
particular future period. For this reason, these amounts are
excluded as indicated. Further, the Company excludes
significant 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 accounted for using the applicable accounting
guidance for exit or disposal cost obligations and other amounts
related to rationalizing its supply chain operations and other
restructuring activities, including upon liquidation of operations
in a country the recognition in income of amounts previously
recorded in equity as a cumulative translation adjustment, 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 useful measure for analysis and
predictive purposes.
The Company believes that excluding from indicated financial
information costs incurred in connection with a significant change
in its capital structure that is of a nature that would be expected
to recur sporadically, also provides a useful measure for analysis
and predictive purposes. The Venezuelan government over the
last several years has severely restricted the ability to translate
bolivars into U.S. dollars and has mandated at various levels the
exchange rate for U.S. dollars. Due to the sporadic timing and
magnitude of changes in the mandated exchange rates, the Company's
non-GAAP measures exclude for analysis and predictive purposes, the
impact from devaluations on the bolivar denominated net monetary
assets, inventory and non-recurring deferred tax balance sheet
positions of the Company in Venezuela at the time of such
devaluations, which have occurred recently for reporting purposes
in the first quarters of both 2013 and 2014.
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 its Fuller trade name 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.
Similarly, in connection with its evaluation of the carrying value
of acquired intangible assets and goodwill, the Company has
periodically recognized impairment charges. The Company
believes that these types of non-cash charges will not be
representative in any single reporting period of amounts recorded
in prior reporting periods or expected to be recorded in future
reporting periods. Therefore, they are excluded from indicated
financial information to also provide a useful measure for analysis
and predictive purposes.
As the impact of changes in exchange rates are an important
factor in understanding period-to-period comparisons, the Company
believes the presentation of results on a local currency basis, in
addition to reported results, helps improve readers' ability to
understand the Company's operating results and evaluate performance
in comparison with prior periods. The Company presents local
currency information that compares results between periods as if
current period exchange rates had been the exchange rates in the
prior period. The Company uses results on a local currency basis as
one measure to evaluate performance. The Company generally
refers to such amounts as calculated on a local currency basis, as
restated or excluding the impact of foreign currency. These results
should be considered in addition to, not as a substitute for,
results reported in accordance with GAAP. Results on a local
currency basis may not be comparable to similarly titled measures
used by other companies and are not measures of performance
presented in accordance with GAAP.
In information included with this release, the Company has
referred to Adjusted EBITDA and a Debt/Adjusted EBITDA ratio, which
are non-GAAP financial measures used in the Company's credit
agreement. The Company uses these measures in its capital
allocation decision process and in discussions with investors,
analysts and other interested parties and therefore believes it is
useful to disclose this amount and ratio. The Company's calculation
of these measures is in accordance with its credit agreement, and
is set forth in the reconciliation from GAAP amounts in an
attachment to this release; however, the reader is cautioned that
other companies define these measures in different ways, and
consequently they will likely not be comparable with similarly
labeled amounts disclosed by others.
TUPPERWARE BRANDS
CORPORATION |
|
FIRST QUARTER SALES
STATISTICS* |
|
|
|
|
|
|
|
|
|
|
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Units |
Reported Sales
Inc/(Dec)% |
Restated+ Sales
Inc/(Dec)% |
Active Sales
Force |
Inc/(Dec) vs. Q1 '13
% |
|
Total Sales
Force |
Inc/(Dec) vs. Q1 '13
% |
|
Europe++ |
(1) |
1 |
104,041 |
(3) |
|
679,141 |
10 |
g |
Asia Pacific++ |
(2) |
9 |
235,043 |
1 |
a |
1,022,057 |
10 |
|
TW North America |
(2) |
2 |
96,542 |
5 |
b, e |
340,304 |
2 |
|
Beauty North America |
(14) |
(11) |
238,708 |
(11) |
c |
465,617 |
(10) |
c |
South America |
24 |
47 |
98,631 |
10 |
d |
374,315 |
17 |
|
Total All Units |
-- |
7 |
772,965 |
(2) |
b, f |
2,881,434 |
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Market Units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe |
(8) |
8 |
63,648 |
(6) |
|
489,062 |
10 |
g |
Asia Pacific |
-- |
12 |
207,202 |
1 |
a |
913,464 |
11 |
|
TW North America |
7 |
12 |
86,731 |
5 |
b |
257,132 |
1 |
|
Beauty North America |
(13) |
(9) |
210,076 |
(10) |
c |
389,430 |
(9) |
c |
South America |
24 |
47 |
98,631 |
10 |
d |
374,315 |
17 |
|
Total Emerging Market Units |
2 |
14 |
666,288 |
(2) |
b |
2,423,403 |
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Established Market Units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe++ |
3 |
(1) |
40,393 |
4 |
|
190,079 |
9 |
|
Asia Pacific++ |
(10) |
-- |
27,841 |
6 |
|
108,593 |
2 |
|
TW North America |
(9) |
(8) |
9,811 |
1 |
e |
83,172 |
2 |
|
Beauty North America |
(17) |
(17) |
28,632 |
(18) |
c |
76,187 |
(15) |
c |
South America |
-- |
-- |
-- |
-- |
|
-- |
-- |
|
Total Established Market Units |
(3) |
(4) |
106,677 |
(3) |
|
458,031 |
1 |
|
* Sales force statistics as collected by the Company and, in
some cases, provided by distributors and sales force. The
Company classifies Established Market Units as those operating in
Western Europe, including Scandinavia, the United States, Canada,
Australia and Japan, and its remaining units as Emerging Market
Units. Active Sales Force is defined as the average number of
people ordering in each cycle over the course of the quarter, and
Total Sales Force is defined as the number of sales force members
of the units as of the end of the quarter.
+ Local currency changes are measured by comparing current year
results with those of the prior year translated at the current
year's foreign exchange rates.
++ Effective as of the beginning of 2014, Nutrimetics France is
being managed by and reported in the Asia Pacific
segment. Prior year information has been reclassified.
Notes
a Local currency sales increase above active seller increase
reflected a mix shift toward Indonesia and China, which have higher
than average order sizes, including in China because it operates an
outlet model without a traditional sales force, and away from India
that has a lower than average order size.
b Higher B2B sales in Mexico had a 3, 6, 0.4 and 0.6 point
positive impact on the local currency sales comparisons for total
Tupperware North America, Tupperware North America emerging
markets, total Company and total emerging markets,
respectively.
c The sales force size deficit in the Beauty North America
segment reflects a lower number and lower recruiting success of
Field Managers at Fuller Mexico, and the need to better engage with
the sales force leadership levels at BeautiControl, both of which
are being addressed. The lower total sales force size led to
the lower number of active sellers in these businesses.
d The active seller comparison in South America lagging the
local currency sales increase primarily reflected inflation related
price increases across the segment.
e The increase in the active seller comparison versus the local
currency sales decrease in Tupperware North America
established markets reflected year-over-year differences in the
promotional program designed to engage a greater number and
proportion of those in the total sales force as a result of less
parties dated and held in light of harsh weather conditions during
much of the quarter.
f The single biggest factor leading to the overall Company's
increase in sales in local currency versus a decrease in active
sellers came from a mix shift away from Fuller Mexico that, based
on its model, has a lower than average order size and a higher than
average activity rate. The factors outlined in notes a - e
above also contributed to the difference.
g The most significant factors in the better total sales force
size versus active sales force size comparison in Europe were more
conservative activity information reported by the distributors in
the CIS, along with disruption in the sales force manager force in
that unit due to a change in an entrepreneur tax in 2013 that has
been rescinded as of the beginning of 2014.
TUPPERWARE BRANDS
CORPORATION |
CONSOLIDATED STATEMENTS
OF INCOME |
|
|
|
(UNAUDITED) |
|
|
|
(In millions, except per share
data) |
13 Weeks Ended Mar. 29,
2014 |
13 Weeks Ended Mar. 30,
2013 |
|
|
|
Net sales |
$ 663.2 |
$ 662.9 |
Cost of products sold |
221.6 |
222.8 |
Gross margin |
441.6 |
440.1 |
|
|
|
Delivery, sales and administrative
expense |
344.5 |
348.5 |
Re-engineering and impairment charges |
2.3 |
2.2 |
Gains on disposal of assets |
1.8 |
-- |
Operating income |
96.6 |
89.4 |
|
|
|
Interest income |
0.7 |
0.6 |
Interest expense |
12.4 |
8.9 |
Other expense |
14.1 |
2.9 |
Income before income taxes |
70.8 |
78.2 |
Provision for income taxes |
18.6 |
20.0 |
Net income |
$ 52.2 |
$ 58.2 |
|
|
|
Net income per common share: |
|
|
|
|
|
Basic earnings per share |
$ 1.04 |
$ 1.09 |
|
|
|
Diluted earnings per share |
$ 1.02 |
$ 1.06 |
|
TUPPERWARE BRANDS
CORPORATION |
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME |
|
|
|
|
|
|
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in millions, except per
share) |
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended Mar 29, 2014 |
13 Weeks Ended Mar 30, 2013 |
Reported % Inc
(Dec) |
Restated % Inc
(Dec) |
Foreign
Exchange Impact * |
|
|
|
|
|
|
Net Sales: |
|
|
|
|
|
Europe |
$ 213.3 |
$ 214.9 |
(1) |
1 |
$ (4.4) |
Asia Pacific |
199.0 |
202.4 |
(2) |
9 |
(20.5) |
TW North America |
81.5 |
82.8 |
(2) |
2 |
(2.5) |
Beauty North America |
73.5 |
85.5 |
(14) |
(11) |
(3.0) |
South America |
95.9 |
77.3 |
24 |
47 |
(12.1) |
|
|
|
|
|
|
|
$ 663.2 |
$ 662.9 |
-- |
7 |
$ (42.5) |
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss): |
|
|
|
|
|
Europe |
$ 40.3 |
$ 37.5 |
7 |
9 |
$ (0.7) |
Asia Pacific |
40.9 |
42.5 |
(4) |
10 |
(5.3) |
TW North America |
13.6 |
12.3 |
10 |
15 |
(0.5) |
Beauty North America |
(0.7) |
6.4 |
+ |
+ |
(0.4) |
South America |
3.4 |
5.7 |
(41) |
(26) |
(1.2) |
|
|
|
|
|
|
|
97.5 |
104.4 |
(7) |
1 |
(8.1) |
|
|
|
|
|
|
Unallocated expenses |
(14.4) |
(15.7) |
(8) |
(13) |
(0.8) |
Gains on disposal of assets |
1.8 |
-- |
+ |
+ |
-- |
Re-engineering charges |
(2.3) |
(2.2) |
6 |
6 |
-- |
Interest expense, net |
(11.8) |
(8.3) |
41 |
41 |
-- |
|
|
|
|
|
|
Income before taxes |
70.8 |
78.2 |
(10) |
2 |
(8.9) |
Provision for income taxes |
18.6 |
20.0 |
(7) |
4 |
(2.1) |
Net income |
$ 52.2 |
$ 58.2 |
(10) |
1 |
$ (6.8) |
|
|
|
|
|
|
Net income per common share
(diluted) |
$ 1.02 |
$ 1.06 |
(4) |
9 |
(0.12) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average number of diluted
shares |
51.1 |
54.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 2014 actual compared
with 2013 translated at 2014 exchange rates. |
|
|
|
|
+ Greater than 100 percent
change. |
|
|
|
|
|
|
TUPPERWARE BRANDS
CORPORATION |
NON-GAAP FINANCIAL
MEASURES |
(UNAUDITED) |
(In millions except per share data) |
|
|
|
|
|
|
|
|
|
13 Weeks Ended Mar 29,
2014 |
13 Weeks Ended Mar 30,
2013 |
|
Reported |
Adj's |
|
Excl Adj's |
Reported |
Adj's |
|
Excl Adj's |
Segment profit (loss) |
|
|
|
|
|
|
|
|
Europe |
$ 40.3 |
$ -- |
|
$ 40.3 |
$ 37.5 |
$ -- |
|
$ 37.5 |
Asia Pacific |
40.9 |
0.6 |
a |
41.5 |
42.5 |
0.2 |
a |
42.7 |
TW North America |
13.6 |
-- |
|
13.6 |
12.3 |
-- |
|
12.3 |
Beauty North America |
(0.7) |
3.7 |
a, d |
3.0 |
6.4 |
0.1 |
a |
6.5 |
South America |
3.4 |
13.6 |
a, b |
17.0 |
5.7 |
3.9 |
b |
9.6 |
|
97.5 |
17.9 |
|
115.4 |
104.4 |
4.2 |
|
108.6 |
|
|
|
|
|
|
|
|
|
Unallocated expenses |
(14.4) |
-- |
|
(14.4) |
(15.7) |
-- |
|
(15.7) |
Gains on disposal of assets |
1.8 |
(1.8) |
c |
-- |
-- |
-- |
|
-- |
Re-eng and impairment chgs |
(2.3) |
2.3 |
d |
-- |
(2.2) |
2.2 |
d |
-- |
Interest expense, net |
(11.8) |
-- |
|
(11.8) |
(8.3) |
-- |
|
(8.3) |
Income before taxes |
70.8 |
18.4 |
|
89.2 |
78.2 |
6.4 |
|
84.6 |
Provision for income taxes |
18.6 |
3.7 |
e |
22.3 |
20.0 |
0.2 |
e |
20.2 |
Net income |
$ 52.2 |
$ 14.7 |
|
$ 66.9 |
$ 58.2 |
$ 6.2 |
|
$ 64.4 |
|
|
|
|
|
|
|
|
|
Net income per common share (diluted) |
$ 1.02 |
$ 0.29 |
|
$ 1.31 |
$ 1.06 |
$ 0.12 |
|
$ 1.18 |
(a) Amortization of intangibles of acquired beauty
units.
(b) Translation impact of $13.4 million in 2014 and $3.9 million
in 2013 related to the net monetary asset balance sheet position in
2014 and the net monetary asset, inventory, and non-recurring
deferred tax balance sheet positions in 2013 from devaluations in
the Venezuelan bolivar to 10.8 and 6.3 bolivars to the dollar in
2014 and 2013, respectively.
(c) Gain on disposal of assets of $1.8 million is primarily
from the sale of land near the Orlando, FL headquarters.
(d) Re-engineering and impairment charges of $2.3 million
in 2014 were mostly for severance costs incurred to reduce
headcount in France, Russia and several other of the Company's
operations, as well as the Company's decision to cease operating
the Armand Dupree business in the United States. Also
associated with this decision was an additional $1.6 million charge
for inventory obsolescence included in the Beauty North America
segment. Re-engineering and impairment charges of $2.2 million
in 2013 were primarily severance costs incurred to reduce headcount
in Eastern Europe, Argentina, Uruguay, and several other of the
Company's operations, as well as relocation and shutdown costs in
several other locations.
(e) 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
STATEMENTS OF CASH FLOWS |
|
|
|
(UNAUDITED) |
|
|
|
|
|
|
(In millions) |
13 Weeks Ended March 29,
2014 |
13 Weeks Ended March 30,
2013 |
|
|
|
OPERATING ACTIVITIES |
|
|
Net cash (used in) provided by operating
activities |
$ (18.3) |
$ 13.9 |
|
|
|
INVESTING ACTIVITIES |
|
|
Capital expenditures |
(14.4) |
(9.1) |
Proceeds from disposal of property, plant
& equipment |
4.2 |
0.5 |
|
|
|
Net cash used in investing
activities |
(10.2) |
(8.6) |
|
|
|
FINANCING ACTIVITIES |
|
|
Dividend payments to shareholders |
(32.6) |
(19.7) |
Net proceeds from issuance of senior
notes |
-- |
200.0 |
Repurchase of common stock |
(16.9) |
(103.6) |
Repayment of long-term debt and capital
lease obligations |
(1.0) |
(0.5) |
Net change in short-term debt |
58.5 |
(71.1) |
Debt issuance costs |
-- |
(0.2) |
Proceeds from exercise of stock
options |
4.8 |
13.8 |
Excess tax benefits from share-based
payment arrangements |
5.8 |
8.3 |
|
|
|
Net cash provided by financing
activities |
18.6 |
27.0 |
|
|
|
Effect of exchange rate changes on cash and
cash equivalents |
(17.8) |
(4.7) |
|
|
|
Net change in cash and cash equivalents |
(27.7) |
27.6 |
|
|
|
Cash and cash equivalents at beginning of
year |
127.3 |
119.8 |
|
|
|
Cash and cash equivalents at end of
period |
$ 99.6 |
$ 147.4 |
|
TUPPERWARE BRANDS
CORPORATION |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
(In millions) |
Mar. 29, 2014 |
Dec. 28, 2013 |
|
|
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
$ 99.6 |
$ 127.3 |
Other current assets |
697.4 |
651.7 |
Total current assets |
797.0 |
779.0 |
|
|
|
Property, plant and equipment,
net |
297.8 |
300.9 |
|
|
|
Other assets |
778.8 |
764.0 |
|
|
|
Total assets |
$ 1,873.6 |
$ 1,843.9 |
|
|
|
Liabilities and Shareholders'
Equity |
|
|
|
|
|
Short-term borrowings and current
portion of long-term debt |
$ 295.4 |
$ 235.4 |
Accounts payable and other current
liabilities |
453.4 |
502.1 |
|
|
|
Total current
liabilities |
748.8 |
737.5 |
|
|
|
Long-term debt |
619.0 |
619.9 |
|
|
|
Other liabilities |
235.6 |
233.6 |
|
|
|
Total shareholders'
equity |
270.2 |
252.9 |
|
|
|
Total liabilities and shareholders'
equity |
$ 1,873.6 |
$ 1,843.9 |
|
|
|
|
|
|
Debt to Adjusted EBITDA*
Ratio as of and for the four quarters ended Mar. 29, 2014: 1.93
times |
|
|
|
*Adjusted EBITDA as defined
in the Company's credit agreement under Consolidated
EBITDA. See calculation attached to this release. |
|
|
TUPPERWARE BRANDS
CORPORATION |
NON-GAAP FINANCIAL
MEASURES OUTLOOK RECONCILIATION SCHEDULE |
April 23,
2014 |
|
|
|
|
(UNAUDITED) |
|
|
|
|
($ in millions, except per share
amounts) |
|
|
|
|
Second Quarter 2013
Actual |
Second Quarter
2014 Outlook |
|
|
Range |
|
|
Low |
High |
|
|
|
|
Income before income taxes |
$ 100.8 |
$ 86.6 |
$ 90.0 |
|
|
|
|
|
|
|
|
Income tax |
24.5 |
23.0 |
23.9 |
Effective Rate |
24% |
27% |
27% |
|
|
|
|
Net Income (GAAP) |
$ 76.3 |
$ 63.6 |
$ 66.1 |
|
|
|
|
% change from prior
year |
|
-17% |
-13% |
|
|
|
|
Adjustments(1): |
|
|
|
Gains on disposal of assets including
insurance recoveries |
$ (0.2) |
$ (0.1) |
$ (0.1) |
Impact of Venezuelan bolivar devaluation
on balance sheet positions |
0.3 |
4.5 |
4.5 |
Re-engineering and other restructuring
costs |
2.2 |
4.2 |
4.2 |
Acquired intangible asset
amortization |
0.3 |
3.0 |
3.0 |
Income tax (2) |
(0.7) |
(1.4) |
(1.4) |
Net Income (adjusted) |
78.2 |
73.8 |
76.3 |
|
|
|
|
Exchange rate impact (3) |
(6.9) |
-- |
-- |
Net Income (adjusted and 2013
restated for currency changes) |
71.3 |
73.8 |
76.3 |
|
|
|
|
% change from prior
year |
|
4% |
7% |
|
|
|
|
Net income (GAAP) per common share
(diluted) |
$ 1.43 |
$ 1.24 |
$ 1.29 |
|
|
|
|
% change from prior
year |
|
-13% |
-10% |
|
|
|
|
Net Income (adjusted) per common share
(diluted) |
$ 1.46 |
$ 1.44 |
$ 1.49 |
|
|
|
|
Net Income (adjusted & restated) per
common share (diluted) |
$ 1.33 |
$ 1.44 |
$ 1.49 |
|
|
|
|
% change from prior
year |
|
8% |
12% |
|
|
|
|
Average number of diluted shares
(millions) |
53.5 |
51.1 |
51.1 |
|
|
(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 on an item-by-item basis |
|
|
|
(3) Difference between 2013
actual and 2013 translated at current currency exchange rates |
|
|
See the note related to Venezuela exchange
rate on the following page. |
|
|
|
|
TUPPERWARE
BRANDS CORPORATION |
NON-GAAP FINANCIAL
MEASURES OUTLOOK RECONCILIATION SCHEDULE |
April 23,
2014 |
|
|
|
|
(UNAUDITED) |
|
|
|
|
($ in millions, except per share
amounts) |
|
|
|
|
Full Year 2013
Actual |
Full Year 2014
Outlook |
|
|
Range |
|
|
Low |
High |
|
|
|
|
Income before income taxes |
$ 360.4 |
$ 342.3 |
$ 352.4 |
|
|
|
|
|
|
|
|
Income tax |
86.2 |
89.2 |
91.7 |
Effective Rate |
24% |
26% |
26% |
|
|
|
|
Net Income (GAAP) |
$ 274.2 |
$ 253.1 |
$ 260.7 |
|
|
|
|
% change from prior
year |
|
-8% |
-5% |
|
|
|
|
Adjustments(1): |
|
|
|
Gains on disposal of assets including
insurance recoveries |
$ (0.7) |
$ (1.9) |
$ (1.9) |
Re-engineering and other restructuring
costs |
9.3 |
10.2 |
10.2 |
Impact of Venezuelan bolivar devaluation
on balance sheet positions |
4.2 |
21.3 |
21.3 |
Acquired intangible asset
amortization |
4.8 |
11.9 |
11.9 |
Income tax (2) |
(3.5) |
(6.7) |
(6.7) |
Net Income (adjusted) |
288.3 |
287.9 |
295.5 |
|
|
|
|
Exchange rate impact (3) |
(20.0) |
-- |
-- |
Net Income (adjusted and 2013 restated for
currency changes) |
268.3 |
287.9 |
295.5 |
|
|
|
|
% change from prior
year |
|
7% |
10% |
|
|
|
|
Net income (GAAP) per common share
(diluted) |
$ 5.17 |
$ 4.97 |
$ 5.12 |
|
|
|
|
% change from prior
year |
|
-4% |
-1% |
|
|
|
|
Net Income (adjusted) per common share
(diluted) |
$ 5.43 |
$ 5.66 |
$ 5.81 |
|
|
|
|
Net Income (adjusted & restated) per
common share (diluted) |
$ 5.05 |
$ 5.66 |
$ 5.81 |
|
|
|
|
% change from prior
year |
|
12% |
15% |
|
|
|
|
Average number of diluted shares
(millions) |
53.1 |
50.9 |
50.9 |
(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 on an item-by-item basis |
(3) Difference between 2013
actual and 2013 translated at current currency exchange rates |
As it relates to Venezuela, the
Company's outlook includes first quarter 2014 operating activity
translated at 6.3 Bs/$ and operating activity for the remainder of
2014 and net monetary assets, inventory and non-recurring deferred
tax assets as of March 29, 2014 at 10.8 Bs/$. If the rate used
for translating the March 29, 2014 balance sheet items had instead
been 49 Bs/$, the Company estimates the additional pretax impact
would be $23 million. The "foreign exchange" impact of translating
2013's second through fourth quarter operating activity at 49 Bs/$
would be $8.8 million ($6.5 million, or $0.13 EPS, after tax). |
|
TUPPERWARE BRANDS
CORPORATION |
ADJUSTED EBITDA AND
DEBT/ADJUSTED EBITDA * |
|
|
(UNAUDITED) |
|
|
|
As of and for the Four
Quarters Ended Mar 29, 2014 |
Adjusted EBITDA: |
|
Net income |
$ 268.2 |
Add: |
|
Depreciation and amortization |
58.3 |
Gross interest expense |
43.7 |
Provision for income taxes |
84.8 |
Pretax non-cash re-engineering and
impairment charges |
2.0 |
Equity compensation |
19.8 |
Deduct: |
|
Gains on land sales, insurance
recoveries, etc. |
(2.5) |
|
|
Total Adjusted EBITDA |
$ 474.3 |
|
|
|
|
Consolidated total debt |
$ 914.5 |
Divided by adjusted EBITDA |
474.3 |
|
|
Debt to Adjusted EBITDA
Ratio |
1.93 |
* Amounts and calculations are based on the definitions and
provisions of the Company's $650 million Credit Agreement dated
September 11, 2013 and, where applicable, are based on the trailing
four quarter amounts. "Adjusted EBITDA" is calculated as
defined for "Consolidated EBITDA" in the Credit Agreement.
CONTACT: Investor Contact:
Teresa Burchfield
(407) 826-4475
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