TUPPERWARE BRANDS CORPORATION ORLANDO, Fla., Jan. 28, 2015 /PRNewswire/ -- (NYSE: TUP) Tupperware Brands Corporation today announced fourth quarter 2014 operating results.
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Rick Goings, Chairman and CEO, commented, "Sales grew 6% this quarter in local currency with particularly robust growth in Argentina, Brazil, China and Indonesia, continuing positive momentum from the third quarter. Our emerging markets were up 10% in local currency and our established markets, while down 1% in local currency, showed sequential improvement of 3 percentage points from the third quarter. On top of good sales, I am proud of the way we were able to improve our value chain to close the quarter with $1.72 in earnings per share excluding items, higher than our guidance by 12 cents in spite of a 4 cent hit compared with our October guidance from foreign exchange headwinds."
Goings continued, "While there continue to be challenging external forces, this quarter's results demonstrated we can and will continue to navigate through the environments we find ourselves in, with our strong global management team using our growth levers: innovative and demonstrable premium products; an entertaining selling situation and direct-to-consumer fundamentals driven through the relationships of our 2.9 million sales force world-wide."
Fourth Quarter Executive Summary
-- Fourth quarter 2014 net sales were $680 million. Emerging markets**,
accounting for 64% of sales, achieved a 10% increase in local currency.
Established markets were down 1% in local currency.
-- GAAP net income of $82.3 million, down 8% versus prior year GAAP net
income of $89.7 million. Excluding the impact of foreign currency rates
on the comparison, net income was up 6% versus prior year. Adjusted
diluted E.P.S. of $1.72 included a 23 cent negative impact versus 2013
from changes in foreign exchange rates, which was 4 cents worse than
included in October's guidance. Earnings per share without items was
down 5% versus last year in dollars and up 9% in local currency.
-- In the fourth quarter, the Company returned $84 million to shareholders
through a dividend payout of $34 million and the open market repurchase
of 769 thousand shares for $50 million. Since 2007, 21.3 million shares
have been repurchased for $1.3 billion, with $0.7 billion left under an
authorization that runs until February 2017.
-- Total sales force of 2.9 million was up 2% versus prior year at the end
of the quarter, with stricter standards in a few markets negatively
impacting the comparison.
Fourth Quarter Business Highlights
Europe: Strong increases by Avroy Shlain in South Africa, Italy, the Middle East, and Turkey offset by lower sales in Austria and Germany
-- Segment sales were even in local currency (down 10% in dollars), a 1
point sequential improvement from the third quarter.
-- Emerging markets were up 6% in local currency. Increases in Avroy Shlain
in South Africa, up 10%; the small Middle East businesses, up 99%; and
Turkey, up 9%, partly offset by CIS, down 3%, although continuing an
improvement in trend.
-- Established markets were down 2% in local currency. Germany was down 5%,
a sequential improvement of 1 point from the third quarter. Austria's
sales decreased, largely due to timing of programs that benefited the
third quarter. Italy's local currency sales were up 8%, continuing a
strong three quarter trend.
Asia Pacific: China, Indonesia, Japan and Korea sales up double digits
-- Sales for the segment were up 7% in local currency (up 2% in dollars),
driven by the emerging markets up 8% in local currency. Growth led by
China, up 20%, Indonesia, the Company's largest business unit, up 16%;
and Korea, up 15%, through a higher active sales force.
Malaysia/Singapore was down 4% partly overcoming difficult externals.
India was down 8% on lower activity. The sales force size gap in India
narrowed by 7 points in the quarter to down 1%.
-- Segment active sales force up 1% versus last year. The 6 percentage
point difference between the sales and active seller comparisons was
primarily related to a mix shift toward China that operates under an
outlet model with very few active sellers and higher productivity and
the absence of Nutrimetics Thailand that was closed in 2013, which had a
much lower than average order size.
Tupperware North America: Sales increase by Tupperware U.S. and Canada offset by large business to business impact in Tupperware Mexico
-- Segment sales down 2% in local currency (down 5% in dollars). Tupperware
United States and Canada sales were up 7% in local currency with strong
underlying indicators. Sales force size closed 3% above prior year.
-- Tupperware Mexico sales down 11%, including lapping a large business to
business sale in the fourth quarter of 2013. Core business was about
even. Sales force size up 4% at the end of fourth quarter compared with
prior year.
Beauty North America: BeautiControl sales up. Fuller Mexico sales down driven by lower sales force size
-- Sales for the segment were down 6% in local currency (down 10% in
dollars), of which 5 points was from the closing in April of the Armand
Dupree business in the United States.
-- BeautiControl sales were up 7%, primarily from higher sales force
activity.
-- Fuller Mexico local currency sales were down 4% from the prior year.
Continued focus on stabilizing and growing the number of sales managers
and total sales force size in a highly competitive and challenging
external environment.
South America: Leveraged 10% larger sales force along with inflation driven price increases
-- Segment sales up 38% in local currency (down 8% in dollars), driven by
increases in Brazil and Argentina. Brazil was up 43% in local currency,
primarily reflecting higher volume from a large sales force size
advantage and a good activity rate.
-- Argentina was up 56% primarily due to higher prices, including a
continued mix shift towards housewares sales away from lower priced
beauty products.
-- Segment's active sales force was up 10%. The 28 point difference between
the sales and active seller comparisons primarily reflected inflation
related price increases throughout the segment and a mix shift towards
Brazil that has a larger than average order size.
-- Brazil profitability better than expected from better supply chain
results compared with the third quarter.
2015 Outlook (Unaudited)
Based on current business trends and foreign currency rates, the Company's first quarter and fiscal 2015 full year guidance is provided below.
Company Level
13 Weeks Ended 13 Weeks 52 Weeks Ended 52 Weeks
Mar 28, 2015 Ended Dec 26, 2015 Ended
------------
Low High Mar 29, 2014 Low High Dec 27, 2014
--- ---- ------------ --- ---- ------------
USD Sales Growth vs Prior Year (12)% (10)% - % (6)% (4)% (2)%
GAAP EPS 0.89 $0.94 $1.02 $4.58 $4.68 $4.20
GAAP Pre-Tax ROS 10.2% 10.5% 10.7% 12.6% 12.6% 11.4%
Local Currency+ Sales Growth vs Prior Year 2% 4% 7% 4% 6% 5%
EPS Excluding Items* $0.98 $1.03 $1.31 $4.90 $5.00 $5.38
Pre-Tax ROS Excluding Items* 11.3% 11.6% 13.5% 13.5% 13.5% 13.9%
FX Impact on EPS Comparison (a) ($0.29) ($0.29) ($0.83) ($0.83)
------------------------------ ------ ------ ------ ------
(a) Impact of changes in foreign currency versus prior year are updated monthly and posted
at: http://ir.tupperwarebrands.com/foreign-exchange-impact.cfm.
---------------------------------------------------------------
Full year 2015
-- Tax rate excluding items is expected to be 25.5%, and 25.3% on a U.S.
GAAP basis.
-- Reflects $50 million full-year open market share repurchases, all in the
fourth quarter.
-- Venezuela:
-- For full year 2015, in the table above, of the 83 cent negative
year-over-year impact of changes in rates on diluted earnings per
share, 23 cents relates to weaker rates for the Venezuelan bolivar.
The bolivar to U.S. dollar exchange rate used in translating the
Company's first quarter 2014 operating activity was 6.3 bolivars to
the U.S. dollar, was 10.8 bolivars to the U.S. dollar in the second
quarter and was 50.0 in the second half of 2014. The Company's
outlook currently assumes it will also use 50.0 bolivars to the U.S.
dollar to translate its future operating activity.
-- As a unit accounted for as hyperinflationary under U.S. GAAP,
Venezuela's functional currency is the U.S. dollar and the impact of
changes in the bolivar to U.S. dollar exchange rate on the unit's
net monetary assets are reflected as a transactional impact in the
Company's net income rather than as a cumulative translation
adjustment. The Company's first half 2014 U.S. GAAP income included
$29.2 million of pretax expense related to net monetary asset
amounts on its March and June 2014 balance sheets being translated
at the 10.8 and 50.0 bolivars to the U.S. dollar rates, rather than
the previous rates. During 2014, there was also a $17.5 million
negative pretax impact of inventory being included in cost of sales
at its historical exchange rate rather than the rate at which sales
were translated. This was partially offset by a third quarter 2014
gain of $4.3 million from accessing cash at better rates than the
50.0 bolivars to the U.S. dollar. Assuming that the 50.0 bolivar to
U.S. dollar exchange rate continues in 2015, there will be a
negative translation impact on the Company's first and second
quarter sales comparisons of 4.3 percentage points and 2.8
percentage points, respectively (1.8 percentage points on the full
year comparison), and a negative impact on the diluted earnings per
share comparisons with 2014 in the first quarter, second quarter,
and full year of 12 cents, 11 cents and 23 cents, respectively.
First quarter 2014 sales and segment profit in Venezuela were $33
million and $9 million, respectively. Second quarter 2014 sales and
segment profit in Venezuela were $24 million and $9 million,
respectively.
Segment Level
-- For the full year, sales in local currency are expected to be about even
in Europe and Tupperware North America, up mid to high single digit in
Asia Pacific, down slightly in Beauty North America and up 20%+ in the
South America segment.
-- Pre-tax return on sales without items for the full year, versus 2014, is
expected to be about even in Europe and Asia Pacific, down around 1
point in Tupperware North America, up about 2 points in Beauty North
America, and down about 1.5 points in dollars and up about 1/2 point in
local currency in South America.
Dividend Declaration
The Company's Board of Directors declared today the Company's regular quarterly dividend. The dividend declared was 68 cents per share, even with the previous quarter. It is payable on April 3, 2015 to shareholders of record as of March 18, 2015. The dividend is in line with the Company's targeted payout ratio of approximately 50% of trailing full year diluted earnings per share without items.
* 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.
Fourth Quarter Earnings Conference Call
Tupperware Brands will conduct a conference call today, Wednesday, January 28, 2015, at 8:30 am Eastern time. The conference call 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", "guidance", "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, 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 changes versus its guidance of 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, beginning in 2015 pension settlements 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 pension settlements, 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 and other balance sheet positions that impact near term income since they appear in the income statement at the exchange rate at which they were originally translated rather than the exchange rate at which current operating activity is being translated, as well as gains from obtaining U.S. dollars at exchange rates more favorable than those at which the bolivars were last recorded. These items have occurred recently for reporting purposes in the first quarter of 2013 and in first, second and third quarters of 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 is 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. This includes the impact on sales and earnings from currency devaluations in Venezuela. 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
FOURTH QUARTER SALES STATISTICS*
(UNAUDITED)
All Units Reported Restated+ Active Inc/(Dec) Total Inc/(Dec)
Sales Sales Sales vs. Q4 '13 Sales vs. Q4 '13
Inc/(Dec)% Inc/(Dec)%
Force % Force %
--- ---
Europe++ (10) - 93,735 (5) a 659,711 (2)
Asia Pacific++ 2 7 254,290 1 b,c 1,077,204 5
TW North America (5) (2) 95,775 2 d 359,284 3
Beauty North America (10) (6) 223,614 (8) e 447,855 (7) e
South America (8) 38 108,344 10 f 398,632 10
---
Total All Units (5) 6 775,758 (1) 2,942,686 2
Emerging Market Units
Europe (8) 6 61,995 (5) a 472,739 (3)
Asia Pacific 5 8 219,164 - b 958,077 4
TW North America (15) (11) 84,795 1 d 273,181 4
Beauty North America (10) (4) 198,016 (8) 381,088 (5)
South America (8) 38 108,344 10 f 398,632 10
---
Total Emerging Market Units (4) 10 672,314 (1) 2,483,717 2
Established Market Units
Europe++ (11) (2) 31,740 (4) 186,972 1
Asia Pacific++ (7) 2 35,126 8 c 119,127 9
TW North America 5 7 10,980 9 86,103 3
Beauty North America (11) (11) 25,598 (4) e 66,767 (16) e
South America - - - - - -
Total Established Market Units (7) (1) 103,444 1 458,969 -
* 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, or restated,
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 The local currency sales increase
in Europe emerging markets with
less active sellers reflected
higher sales force qualification
standards in Russia, Middle East
and North Africa and increased
prices in Turkey.
b Higher sales with less active
sellers in Asia emerging markets
reflected a mix shift toward China
that operates under an outlet
model with very few active sellers
and higher productivity from
higher sales force qualification
standards and the absence of
Nutrimetics Thailand that was
closed in 2013, which had a much
lower than average order size.
c A larger increase in active
sellers than local currency sales
in Asia established markets
reflected a shift away from
Tupperware Australia/New Zealand
that has the highest order size of
the segment.
d Lower B2B sales by Tupperware
Mexico had a negative impact on
the local currency sales
comparisons of 5, 11, 0.7 and 1
percentage points for Tupperware
North America, Tupperware North
America emerging markets, total
Company and total emerging
markets, respectively. This also
negatively impacted the total and
active sales force comparisons in
these captions.
e In April 2014, the Company ceased
operating its Armand Dupree
business in the United States.
This had a negative impact on the
local currency sales comparisons
of 4, 17, 0.5 and 1 percentage
points for total Beauty North
America, Beauty North America
established markets, total Company
and total established markets,
respectively. This also
negatively impacted the total and
active sales force comparisons in
these captions. There was also a
significant negative impact on the
total sales force size comparison
of BeautiControl, as an ultimately
ineffective promotional approach
from 2013 was not repeated.
f The much higher local currency
sales increase in South America,
compared with the increase in
active sellers, reflected
inflation-driven price increases
throughout the segment and a mix
shift toward Brazil that has a
larger than average order size.
TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In millions, except per share data) 13 Weeks Ended 52 Weeks Ended
-------------- --------------
Dec 27, Dec 28, Dec 27, Dec 28,
2014 2013 2014 2013
---- ---- ---- ----
Net sales $679.9 $717.1 $2,606.1 $2,671.6
Cost of products sold 227.5 241.4 884.0 889.8
----- ----- ----- -----
Gross margin 452.4 475.7 1,722.1 1,781.8
Delivery, sales and administrative expense 331.3 346.5 1,346.1 1,369.7
Re-engineering charges 2.7 2.2 11.0 9.3
Gain (loss) on disposal of assets 0.4 (0.4) 2.7 0.7
--- ---- --- ---
Operating income 118.8 126.6 367.7 403.5
Interest income 1.0 0.7 3.0 2.6
Interest expense 10.6 10.7 46.5 40.2
Other (income) expense (0.3) 0.5 26.0 5.5
---- --- ---- ---
Income before income taxes 109.5 116.1 298.2 360.4
Provision for income taxes 27.2 26.4 83.8 86.2
Net income $82.3 $89.7 $214.4 $274.2
===== ===== ====== ======
Net income per common share:
Basic earnings per share $1.65 $1.78 $4.28 $5.28
Diluted earnings per share $1.63 $1.74 $4.20 $5.17
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In millions, except per share data) 13 Weeks Ended Reported Restated* Foreign 52 Weeks Ended Reported Restated* Foreign
-------------- --------------
Dec 27, Dec 28, % % Exchange Dec 27, Dec 28, % % Exchange
2014 2013 2014 2013
---- ---- ---- ----
Inc (Dec) Inc (Dec) Impact* Inc (Dec) Inc (Dec) Impact*
-------- -------- ------ -------- -------- ------
Net Sales:
Europe $194.0 $215.2 (10) - $(21.5) $730.3 $771.5 (5) (1) $(32.9)
Asia Pacific 230.2 225.6 2 7 (10.6) 849.9 848.1 - 6 (48.3)
TW North America 90.4 94.9 (5) (2) (3.1) 349.9 358.0 (2) - (8.2)
Beauty North America 70.9 78.9 (10) (6) (3.8) 290.9 320.1 (9) (6) (9.5)
South America 94.4 102.5 (8) 38 (34.2) 385.1 373.9 3 36 (89.9)
---- ----- ----- ----- ----- -----
$679.9 $717.1 (5) 6 $(73.2) $2,606.1 $2,671.6 (2) 5 $(188.8)
====== ====== ====== ======== ======== =======
Segment profit:
Europe $43.7 $47.8 (9) - $(4.2) $118.2 $130.6 (10) (5) $(6.3)
Asia Pacific 58.2 54.8 6 11 (2.5) 191.0 187.5 2 9 (12.7)
TW North America 18.9 21.7 (13) (9) (0.9) 68.3 65.9 4 7 (2.0)
Beauty North America 0.2 1.1 (87) (80) (0.4) 1.3 16.1 (92) (91) (1.2)
South America 18.5 19.4 (4) 48 (6.8) 27.1 68.9 (61) (46) (18.9)
---- ---- ---- ---- ---- -----
139.5 144.8 (4) 7 (14.8) 405.9 469.0 (13) (5) (41.1)
Unallocated expenses (18.1) (16.1) 12 6 (0.8) (55.9) (62.4) (11) (14) (2.8)
Gain (loss) on disposal of assets 0.4 (0.4) - - - 2.7 0.7 + + -
Re-engineering charges (2.7) (2.2) 23 23 - (11.0) (9.3) 19 19 -
Interest expense, net (9.6) (10.0) (3) (3) - (43.5) (37.6) 16 16 -
---- ----- --- ----- ----- ---
Income before taxes 109.5 116.1 (6) 9 (15.6) 298.2 360.4 (17) (6) (43.9)
Provision for income taxes 27.2 26.4 3 20 (3.7) 83.8 86.2 (3) 11 (10.4)
---- ---- ---- ---- ---- -----
Net income $82.3 $89.7 (8) 6 $(11.9) $214.4 $274.2 (22) (11) $(33.5)
===== ===== ====== ====== ====== ======
Net income per common share (diluted) $1.63 $1.74 (6) 8 $(0.23) $4.20 $5.17 (19) (7) $(0.64)
Weighted average number of diluted shares 50.6 51.5 51.0 53.1
* 2014 actual compared
with 2013 translated at
2014 exchange rates
+ Greater than 100% change
TUPPERWARE BRANDS CORPORATION
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(In millions, except per share data) 13 Weeks Ended Dec 27, 2014 13 Weeks Ended Dec 28, 2013
--------------------------- ---------------------------
Reported Adj's Excl Adj's Reported Adj's Excl Adj's
-------- ----- ---------- -------- ----- ----------
Segment profit:
Europe $43.7 $ - $43.7 $47.8 $ - $47.8
Asia Pacific 58.2 0.7 a 58.9 54.8 0.6 a 55.4
TW North America 18.9 - 18.9 21.7 - 21.7
Beauty North America 0.2 2.1 a,d 2.3 1.1 2.2 a 3.3
South America 18.5 0.4 a,b 18.9 19.4 0.1 a 19.5
139.5 3.2 142.7 144.8 2.9 147.7
Unallocated expenses (18.1) - (18.1) (16.1) - (16.1)
Gain (loss) on disposal of assets 0.4 (0.4) c - (0.4) 0.4 c -
Re-engineering charges (2.7) 2.7 d - (2.2) 2.2 d -
Interest expense, net (9.6) - (9.6) (10.0) - (10.0)
---- --- ---- ----- --- -----
Income before taxes 109.5 5.5 115.0 116.1 5.5 121.6
Provision for income taxes 27.2 1.0 e 28.2 26.4 2.0 e 28.4
---- --- ---- ---- --- ----
Net income $82.3 $4.5 $86.8 $89.7 $3.5 $93.2
===== ==== ===== ===== ==== =====
Net income per common share (diluted) $1.63 $0.09 $1.72 $1.74 $0.07 $1.81
===== ===== ===== ===== ===== =====
52 Weeks Ended Dec 27, 2014 52 Weeks Ended Dec 28, 2013
--------------------------- ---------------------------
Reported Adj's Excl Adj's Reported Adj's Excl Adj's
-------- ----- ---------- -------- ----- ----------
Segment profit:
Europe $118.2 $0.1 a $118.3 $130.6 $0.1 a $130.7
Asia Pacific 191.0 3.1 a,d 194.1 187.5 1.3 a 188.8
TW North America 68.3 - 68.3 65.9 - 65.9
Beauty North America 1.3 10.5 a,d 11.8 16.1 3.2 a 19.3
South America 27.1 43.0 a,b 70.1 68.9 4.4 a,b 73.3
405.9 56.7 462.6 469.0 9.0 478.0
Unallocated expenses (55.9) - (55.9) (62.4) - (62.4)
Gain (loss) on disposal of assets 2.7 (2.7) c - 0.7 (0.7) c -
Re-engineering charges (11.0) 11.0 d - (9.3) 9.3 d -
Interest expense, net (43.5) - (43.5) (37.6) - (37.6)
----- --- ----- ----- --- -----
Income before taxes 298.2 65.0 363.2 360.4 17.6 378.0
Provision for income taxes 83.8 4.8 e 88.6 86.2 3.5 e 89.7
---- --- ---- ---- --- ----
Net income $214.4 $60.2 $274.6 $274.2 $14.1 $288.3
====== ===== ====== ====== ===== ======
Net income per common share (diluted) $4.20 $1.18 $5.38 $5.17 $0.26 $5.43
===== ===== ===== ===== ===== =====
a Amortization of intangibles of
acquired beauty units.
b As a result of step devaluations
in the Venezuelan bolivar from 5.3
bolivars per U.S. dollar to 6.3,
10.8 and 50.0 bolivars per U.S.
dollar as of the end of January
2013, March 2014 and June 2014,
respectively, the Company had
impacts of $0.2 million and $42.4
million in the fourth quarter and
year-to-date periods of 2014 and
$4.2 million in the year-to-date
period of 2013. These amounts
related to expense from
translating bolivar denominated
net monetary assets at the lower
exchange rates at the times of
devaluations, along with the
impact of recording in income
amounts on the balance sheet when
the devaluations occurred,
primarily inventory, at which the
amounts went on the balance sheet,
rather than the exchange rates in
use when they were included in
income. In the third quarter of
2014, the Company received $5.6
million for approximately 51
million bolivars at an average
exchange rate of 9.1 bolivars per
U.S. dollar, which generated an
exchange gain of $4.6 million.
c Gain on disposal of assets of
$2.7 million in 2014 is primarily
from the sale of land near the
Orlando, FL headquarters in the
first quarter and $1.1 million
from the sale of a facility in
Australia that resulted in
proceeds in the second and fourth
quarters. Gain on disposal of
assets of $0.7 million in 2013 is
primarily from the sale of land in
Orlando.
d In both years, re-engineering
and impairment charges were
primarily related to severance
costs incurred for headcount
reduction in several of the
Company's operations in connection
with changes in its management and
organizational structures, and in
2014, the decision to cease
operating its Armand Dupree
business in the United States, its
Nutrimetics business in Thailand
and a manufacturing plant in
India.
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 STATEMENT OF CASH FLOWS
(UNAUDITED)
(In millions) 52 Weeks Ended 52 Weeks Ended
December 27, December 28,
2014 2013
---- ----
Operating Activities:
Net cash provided by operating
activities $282.1 $323.5
Investing Activities:
Capital expenditures (69.4) (69.0)
Proceeds from disposal of
property, plant & equipment 7.1 8.9
Net cash used in investing
activities (62.3) (60.1)
Financing Activities:
Dividend payments to
shareholders (133.5) (116.8)
Net proceeds from issuance of
senior notes - 200.0
Repurchase of common stock (92.3) (379.4)
Repayment of long-term debt
and capital lease obligations (3.0) (2.5)
Net change in short-term debt (2.2) 27.8
Debt issuance costs - (2.2)
Proceeds from exercise of
stock options 15.7 21.0
Excess tax benefits from
share-based payment
arrangements 6.3 14.5
--- ----
Net cash used in financing
activities (209.0) (237.6)
Effect of exchange rate
changes on cash and cash
equivalents (61.1) (18.3)
----- -----
Net change in cash and cash
equivalents (50.3) 7.5
Cash and cash equivalents at
beginning of year 127.3 119.8
----- -----
Cash and cash equivalents at
end of period $77.0 $127.3
===== ======
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions) Dec 27, Dec 28,
2014 2013
---- ----
Assets:
Cash and cash equivalents $77.0 $127.3
Other current assets 669.3 651.7
----- -----
Total current assets 746.3 779.0
Property, plant and equipment, net 290.3 300.9
Other assets 793.7 764.0
----- -----
Total assets $1,830.3 $1,843.9
======== ========
Liabilities and Shareholders' Equity:
Short-term borrowings and current portion
of long-term debt $221.4 $235.4
Accounts payable and other current
liabilities 578.9 502.1
----- -----
Total current liabilities 800.3 737.5
Long-term debt 615.2 619.9
Other liabilities 231.4 233.6
Total shareholders' equity 183.4 252.9
----- -----
Total liabilities and shareholders' equity $1,830.3 $1,843.9
======== ========
Debt to Adjusted EBITDA* Ratio
as of and for the four quarters
ended Dec 27, 2014: 1.95 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
January 28, 2015
(UNAUDITED)
First Quarter First Quarter
(In millions, except per
share data) 2014 Actual 2015 Outlook
----------- ------------
Range
Low High
--- ----
Income before income taxes $70.8 $59.7 $62.8
Income tax $18.6 $15.0 $15.8
Effective Rate 26% 25% 25%
Net Income (GAAP) $52.2 $44.7 $47.0
% change from prior year (14)% (10)%
------------------------ ---- ----
Adjustments(1):
Gain on disposal of assets (1.8) - -
Re-engineering,
restructuring and pension
settlements 3.9 3.8 3.8
Net impact of Venezuelan
bolivar devaluations 13.4 - -
Acquired intangible asset
amortization 2.9 2.7 2.7
Income tax(2) (3.7) (1.8) (1.8)
---- ---- ----
Net Income (adjusted) $66.9 $49.4 $51.7
Exchange rate impact(3) (14.9) - -
----- --- ---
Net Income (adjusted and 2014
restated for currency
changes) $52.0 $49.4 $51.7
% change from prior year (5)% (1)%
------------------------ --- ---
Net income (GAAP) per common
share (diluted) $1.02 $0.89 $0.94
% change from prior year (13)% (8)%
------------------------ ---- ---
Net Income (adjusted) per
common share (diluted) $1.31 $0.98 $1.03
Net Income (adjusted &
restated) per common share
(diluted) $1.02 $0.98 $1.03
% change from prior year (4)% 1%
------------------------ --- ---
Average number of diluted
shares (millions) 51.1 50.1 50.1
==== ==== ====
( )
(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 2014
actual and 2014 translated at
current currency exchange
rates
TUPPERWARE BRANDS CORPORATION
NON-GAAP FINANCIAL MEASURES OUTLOOK RECONCILIATION SCHEDULE
January 28, 2015
(UNAUDITED)
Full Year Full Year
(In millions, except per
share data) 2014 Actual 2015 Outlook
----------- ------------
Range
Low High
--- ----
Income before income taxes $298.2 $307.1 $313.7
Income tax $83.8 $77.6 $79.3
Effective Rate 28% 25% 25%
Net Income (GAAP) $214.4 $229.5 $234.4
% change from prior year 7% 9%
------------------------ --- ---
Adjustments(1):
Gains on disposal of assets $(2.7) $ - $ -
Re-engineering,
restructuring and pension
settlements 13.4 11.3 11.3
Net impact of Venezuelan
bolivar devaluations 42.4 - -
Acquired intangible asset
amortization 11.9 10.9 10.9
Income tax(2) (4.8) (6.4) (6.4)
---- ---- ----
Net Income (adjusted) $274.6 $245.3 $250.2
Exchange rate impact(3) (42.6) - -
----- --- ---
Net Income (adjusted and 2014
restated for currency
changes) $232.0 $245.3 $250.2
% change from prior year 6% 8%
------------------------ --- ---
Net income (GAAP) per common
share (diluted) $4.20 $4.58 $4.68
% change from prior year 9% 11%
------------------------ --- ---
Net Income (adjusted) per
common share (diluted) $5.38 $4.90 $5.00
Net Income (adjusted &
restated) per common share
(diluted) $4.55 $4.90 $5.00
% change from prior year 8% 10%
------------------------ --- ---
Average number of diluted
shares (millions) 51.0 50.1 50.1
==== ==== ====
(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 2014
actual and 2014 translated at
current currency exchange
rates
TUPPERWARE BRANDS CORPORATION
ADJUSTED EBITDA AND DEBT/ADJUSTED EBITDA*
(UNAUDITED)
As of and for
the four
quarters ended
December 27,
2014
----
Adjusted EBITDA:
Net income $214.4
Add:
Depreciation and amortization 63.7
Gross interest expense 46.5
Provision for income taxes 83.8
Pretax non-cash re-engineering and
impairment charges 3.8
Equity compensation 18.9
Deduct:
Gains on land sales, insurance recoveries,
etc. (2.7)
----
Total Adjusted EBITDA $428.4
Consolidated total debt $836.6
Divided by adjusted EBITDA 428.4
Debt to Adjusted EBITDA Ratio 1.95 a
====
* 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.
a There is a $42.4 million impact
on adjusted EBITDA from the
Venezuelan bolivar devaluations
as of the end of March and June
2014 that increased the debt to
adjusted EBITDA ratio by 0.17.
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SOURCE Tupperware Brands Corporation
