Amended Credit Agreement Provides Increased
Financial Flexibility
Re-engineering Programs Accelerated
Omni Channel Expansion Success
Continues
ORLANDO,
Fla., March 1, 2023 /PRNewswire/ -- Tupperware
Brands Corporation (NYSE: TUP), a leading global consumer products
company, today reported preliminary operating results for the
fourth quarter and fiscal year ended December 31, 2022.
Preliminary Full Year 2022 Financial Summary*
- Net sales were $1,305.6 million,
a decrease of 18% year over year (or 14% on a constant currency
basis)
- Gross profit was $836.4 million,
or 64.1% of net sales
- Loss from continuing operations was $28.4 million
- Diluted (loss) earnings per share from continuing operations
was $(0.62)
- Adjusted diluted (loss) earnings per share (non-GAAP) from
continuing operations was $0.46
- Adjusted EBITDA (non-GAAP) from continuing operations was
$124.0 million
- Consolidated Net Leverage Ratio was 4.88x at December 31, 2022
Preliminary Fourth Quarter 2022 Financial Summary*
- Net sales were $313.7 million, a
decrease of 20% year over year (or 14% on a constant currency
basis)
- Gross profit was $196.5 million,
or 62.6% of net sales
- Loss from continuing operations was $35.2 million
- Diluted (loss) earnings per share from continuing operations
was $(0.79)
- Adjusted diluted (loss) earnings per share (non-GAAP) from
continuing operations was $(0.24)
- Adjusted EBITDA (non-GAAP) from continuing operations was
$24.4 million
"2022 was a true test of our resolve to turn around this Company
and expand consumer access to our iconic brand in markets all
around the world," said Miguel
Fernandez, President and Chief Executive Officer of
Tupperware Brands. "We entered the year optimistic about our
progress in improving our business economics and executing on our
growth plans. Events did not unfold in our favor, so we
reacted quickly to the challenges. Importantly, we remained
unwavering in our pursuit of building a broader Tupperware
ecosystem in which to reach consumers eager to interact with our
products. In the US, our first major retail expansion effort
exceeded our expectations," he added. "We have now pivoted
towards a new post-pandemic phase where we believe our core direct
selling business will benefit from the return to in-person events,
focusing on recruiting and training our next generation of business
builders, and where those markets utilizing our studio model,
particularly China, are able to
benefit from more consumer traffic."
"We raised prices to protect gross margins, worked with our
banks to provide more financial flexibility, accelerated our
re-engineering efforts as part of our ongoing commitment to right
size the business, and developed innovative programs to
significantly reduce inventories in the fourth quarter," said
Mariela Matute, Chief Financial
Officer of Tupperware Brands. "While we are pleased with
these positive initiatives, we expect 2023 to be a transition year,
as we work to stabilize the business and solidify our financial
foundation."
*Results are preliminary pending the finalization of certain
open items, predominantly related to income taxes. A
reconciliation of these preliminary non-GAAP measures to comparable
GAAP measures can be found in the tables included in this
release.
Full Year 2022 Operating Results
Total net sales were $1,305.6
million, a decrease of 18% (or 14% on a constant currency
basis) compared to the prior year period. Net sales in
South America increased 10% in
constant currency, with stable performance in Brazil augmented by strong growth elsewhere in
the region, particularly in Argentina. Outside of
South America, net sales declined
in the double digits, impacted by COVID-related lockdowns,
particularly in China, and
declining consumer sentiment, predominately in Europe. In
North America, actions taken to improve the economics of those
markets adversely impacted the top line. For detailed
performance by region, please refer to the segment tables in the
appended exhibit.
Gross profit was $836.4 million,
as compared to $1,066.0 million for
the prior year period. Gross margin was 64.1%, as compared to 66.6%
for the prior year period. Lower unit volumes, higher resin
costs and other inflationary pressures, partially offset by pricing
initiatives, drove the decline.
Selling, General and Administrative (SG&A) expenses of
$742.9 million declined 10.4% from
the prior year period. As a percent of sales, SG&A
increased 510 basis points to 56.9% of sales in 2022 versus the
51.8% reported in 2021 due to lower fixed cost absorption, mainly
due to lower sales.
(Loss) income from continuing operations was $(28.4) million, as compared to $152.2 million for the prior year period. Diluted
(loss) earnings per share was $(0.62), as compared to $2.87 for the prior year period. Lower
sales and operating margins, coupled with a sharply higher
effective tax rate, partially offset by fewer shares outstanding,
drove the decline. Adjusted diluted earnings per share
(non-GAAP) was $0.46, as compared to
$3.31 for the prior year
period.
Fourth Quarter 2022 Operating Results
Total net sales were $313.7
million, a decrease of 20% (or 14% on a constant currency
basis) compared to the prior year period. South America sales increased 24% led by
double digit growth in Brazil and
ongoing strong performance elsewhere in the region, particularly in
Argentina. In North America, net sales declined 20% as the
effect of pricing and compensation plan actions resulted in lower
sales than expected. Asia
Pacific net sales declined 22% as China continued to be adversely impacted by
COVID. Although strict lockdowns earlier in the quarter were
reversed later in the quarter, our supply chain was affected by
pandemic-related employee absences throughout the quarter.
While market conditions in China
remains somewhat volatile, we are optimistic that, as our employees
return to work and consumer mobility increases, our business in
China should show improvement as
2023 progresses. Elsewhere in Asia
Pacific, results were impacted by a smaller and less
productive sales force, partially offset by continued double digit
growth in Korea, which is one of our more advanced omnichannel
markets. Sales in Europe
also declined 22%, mostly due to lower sales force activity and B2B
business that did not materialize as expected this year, as
consumer activity remains subdued due to geopolitical concerns and
widespread inflationary fears. For detailed performance by
region, please refer to the segment tables in the appended
exhibit.
Gross profit was $196.5 million,
as compared to $390.1 million for the
prior year period. Gross margin was 62.6%, up 100 basis
points as compared to 61.6% for the prior year period, the first
year over year improvement for the gross margin in six
quarters. Gross margin is beginning to benefit from our
recent pricing actions and better category management.
Selling, General and Administrative expenses declined 16.1%
compared to the prior year period, but increased 230 basis points
as a percent of sales to 55.8% from 53.5% in the prior year
period. While this was an improvement in trends from the
first three quarters of 2022, we have accelerated our
re-engineering efforts, taking $15.6
million in charges in the 2022 fourth quarter, which is more
than we took in aggregate in the first three quarters of the
year.
(Loss) income from continuing operations was $(35.2) million, as compared to $15.4 million for the prior year period. Diluted
(loss) earnings per share was $(0.79), as compared to $0.30 for the prior year period. Lower volumes
and operating margins, coupled with increased interest rates and a
higher tax rate, drove the decline. Adjusted diluted (loss)
earnings per share (non-GAAP) was $(0.24), as compared to $0.39 for the prior year period.
Liquidity and Balance Sheet
We ended the year with $705.4
million in total debt, slightly below the $709.4 million at the end of 2021. Our cash
generation improved in the fourth quarter from trends earlier in
the year as a result of stringent inventory management and cost
controls, coupled with the pricing initiatives that were taken
throughout the year.
On February 22, 2023, the Company
entered into a Third Amendment to its November 2021 Credit Agreement (the "Third
Amendment"), which provided for, among other things, additional
relief with respect to both the maximum permitted Consolidated
Leverage Ratio and minimum permitted Consolidated Interest Coverage
Ratio as the Company anticipated that would have otherwise violated
financial covenants in 2023. The Third Amendment follows the
First Amendment to the Credit Agreement, entered into on
August 1, 2022, and the Second
Amendment to the Credit Agreement, entered into on December 21, 2022, which the Company entered into
to provide relief as the Company anticipated it would have
otherwise violated financial covenants disclosed in the Company's
financial statements for the third quarter of 2022. In
consideration of the additional flexibility provided by the Third
Amendment, the Company anticipates that it will remain compliant
with financial covenants associated with the Credit Agreement for
the year following the issuance of the financial statements.
Preliminary Results, Prior Period Misstatements and Material
Weakness in Internal Controls Over Financial Reporting
The Company is in the process of finalizing its financial close
process as of and for the fourth quarter and year ended
December 31, 2022. Accordingly,
these financial results included in this earnings release are
preliminary and are subject to change.
In connection with its year end financial close process, the
Company has identified misstatements which originated in prior
annual and unaudited interim periods, the most significant of which
to date relate to the Company's historical accounting for income
taxes. Until the Company has completed its final close
process, there is the possibility that additional current and prior
period misstatements could be identified. The Company will
reflect the correction of the previously issued financial
statements in its Annual Report on Form 10-K for the 2022 fiscal
year (the "Form 10-K"). The Company is evaluating the method of
correction. The preliminary results as of and for the interim and
annual periods ended December 25,
2021 have been adjusted to correct for the prior periods
misstatements identified through the date of this press
release.
In addition, the Company concluded that it did not design and
maintain effective internal controls related to the accounting for
the completeness, occurrence, accuracy, and presentation of the
income tax provision and related income tax assets and
liabilities. Accordingly, in the 2022 Form 10-K, the Company
will disclose a material weakness in internal control over
financial reporting and, as a result, that its disclosure controls
and procedures and internal control over financial reporting were
not effective as of December 31,
2022.
53rd Week
Fiscal year 2022 consisted of 53 weeks versus 52 weeks in fiscal
2021. The extra week added approximately 1% to net sales for
the year and approximately 4% to net sales in the fourth
quarter.
Earnings Conference Call
The Company will host its fourth quarter 2022 earnings
conference call today, March 1, 2023, at 8:30 a.m. ET. A link to the live webcast can be
found under the Events and Presentations section of the Company's
Investor Relations page on the Company's website at
https://ir.tupperwarebrands.com. A webcast replay will be made
available in the same section of the Company's Investor Relations
website later today.
About Tupperware Brands Corporation
Tupperware Brands Corporation (NYSE: TUP) is a leading global
consumer products company that designs innovative, functional and
environmentally responsible products that people love and trust.
Founded in 1946, Tupperware's signature container created the
modern food storage category that revolutionized the way the world
stores, serves and prepares food. Today, this iconic brand has more
than 8,500 functional design and utility patents for
solution-oriented kitchen and home products. With a purpose to
nurture a better future, Tupperware products are an alternative to
single-use items. The Company distributes its products into nearly
70 countries primarily through independent representatives around
the world. For more information, visit Tupperwarebrands.com or
follow Tupperware on Facebook, Instagram, LinkedIn and Twitter.
Forward-Looking Statements
Statements contained in this release that are not historical
fact and use predictive words such as "estimates", "outlook",
"guidance", "expect", "believe", "anticipate", "intend", "project",
"designed", "target", "plans", "may", "will", "are confident",
"should", "would", "could" and similar words are forward-looking
statements. These forward-looking statements and related
assumptions involve risks and uncertainties that could cause actual
results and outcomes to differ materially from any forward-looking
statements or views expressed herein. These risks and uncertainties
include, but are not limited to, the following: the potential
impact of management's prior determinations that the Company may
not be able to continue to operate as a going concern; the costs
and covenant restrictions associated with the Company's current
credit facility with Wells Fargo Bank, N.A. and the other lenders;
the Company's ability to comply with, or further amend, financial
covenants under its credit agreement and its ability to repay or
refinance the debt outstanding under its current credit facility
and take other actions to address its capital structure, as well as
potential downgrades to the Company's credit ratings; the absence
of foreign exchange lines of credit; the financial risks resulting
from the Company's international operations, including exposure to
foreign currency restrictions, our ability to repatriate cash from
jurisdictions outside of the United
States, and the impact of international sanctions; the
Company's ability to generate strong operating cash flow and the
ability of financing sources; the Company's ability to implement
and maintain effective internal control over financial reporting;
the Company's ability to remediate the material weakness
identified, as well as the reasonable possibility that, until such
material weakness is remediated, the material weakness could result
in a material misstatement to the Company's annual or interim
consolidated financial statements that would not be prevented or
detected; risks related to litigation against the Company,
including pending securities class action lawsuits filed against
the Company and certain of its current and former officers and
directors; the quality and safety of our products; risks arising
from the application of environmental laws and regulations;
security incidents and attacks on our information technology
systems; the successful execution of the Company's Turnaround Plan
and other operating or cost-saving initiatives; the successful
recruitment retention and productivity levels of the Company's
independent sales force and the Company's employees' the ability of
our sales force to adapt to changing consumer needs, the Company's
ability to anticipate and respond to market trends and changes in
consumer preferences; the Company's ability to accurately forecast
demand for our products; change in economic environment, including
the effects of inflation, rising interest rates and/or recession on
the Company's business; our compliance with the U.S. Foreign
Corrupt Practices Act or similar U.S. or foreign anti-bribery and
anti-corruption laws and regulations in the jurisdictions in which
we operate; the effects of political, legal, tax and regulatory
risks on our international markets; risk that direct selling
laws and regulations in any of the Company's markets may be
modified, interpreted or enforced in a manner that results in
negative changes to the Company's business models or negatively
impacts its revenue, sales force or business, including through the
interruption of recruiting and sales activities, loss of licenses,
imposition of fines, or any other adverse actions or events;
unpredictable economic and political conditions and events
globally, including any public health emergencies, such as the
COVID-19 pandemic; the continued service of our senior management
and other key employees, and our ability to retain highlight
talented personnel at all levels; the inability of our suppliers to
supply certain raw materials or a disruption or interruption in the
supply chain; the Company's ability to protect its intellectual
property rights, or our conflict with the rights of others; the
volatility of the price of our common stock; and other risks
detailed in the Company's periodic reports as filed in accordance
with the Securities Exchange Act of 1934, as amended.
The Company updates each month the impact of changes in foreign
exchange rates versus the prior year, posting it on Tupperware
Brands Foreign Exchange Translation Impact Update. Other than
updating for changes in foreign currency exchange rates, the
Company does not intend to update forward-looking information.
Non-GAAP Financial Measures
The Company utilizes non-GAAP financial measures in this
release, specifically, Adjusted EBITDA from continuing operations
("Adjusted EBITDA"), Adjusted Diluted Earnings Per Share from
continuing operations ("Adjusted Diluted Earnings Per Share"), Debt
Covenant EBITDA, and Consolidated Net Leverage Ratio, each of which
are provided to assist readers' understanding of the Company's
results of operations. The Company believes Adjusted EBITDA and
Adjusted Diluted Earnings Per Share are useful as they are used by
management in their capital allocation decision process and in
discussions with investors, analysts, and other interested parties.
These measures are based on a continuing operations basis. Debt
Covenant EBITDA and Consolidated Net Leverage Ratio are useful as
they reflect the Company's liquidity as required under its credit
facility. These measures are based on a consolidated basis with the
results of both continuing operations and discontinued operations
included. These amounts exclude certain items that at times
materially impact the comparability of the Company's results of
operations. The adjusted information is intended to be indicative
of the Company's primary operations, and to assist readers in
evaluating performance and analyzing trends across periods by
providing what the Company believes is a useful measure for
predictive purposes. These results should be considered in addition
to, not as a substitute for, results reported in accordance with
GAAP.
The non-GAAP financial measures include comparisons related to
profit that exclude:
- gains from the sale of property, plant and equipment and other
real estate related operations
- insurance settlement gains or significant charges related to
casualty losses caused by significant weather events, fires or
similar circumstances
- exit or disposal cost obligations related to rationalizing
supply chain operations and other re-engineering activities
performed to wind-down or significantly restructure businesses,
including cumulative translation adjustments recognized in income
upon liquidation of operations in a country, asset sales or fixed
asset impairments, inventory obsolescence and other operating
losses incurred in conjunction with such activities
- certain asset retirement obligations
- pension settlements
- significant discrete impacts of new tax laws upon adoption,
including the impact on cumulative deferred taxes from items
previously recorded as cumulative translation adjustments
- amortization of definite-lived intangible assets
- non-cash impairment charges related to the carrying value of
acquired intangible assets and goodwill
- infrequent costs incurred in connection with a change in
capital structure
- the impact from hyper-inflationary economies on net monetary
assets and other balance sheet positions that impact near term
income
- non-recurring costs associated with the turnaround plan
While these types of events can and do recur periodically, they
are not part of the Company's primary business operations and are
excluded from indicated financial information due to their
distinction from ongoing business operations, inherent volatility
and impact on the comparability of earnings across periods, as
amounts recognized in any given period are not indicative of
amounts that may be recognized in any particular future period.
Also, 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 constant 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 constant
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 constant currency basis
as one measure to evaluate performance and generally refers to such
amounts as restated or excluding the impact of foreign
currency.
These core sales and constant currency results should be
considered in addition to, not as a substitute for, results
reported in accordance with GAAP. Core sales and results on a
constant 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.
Information included with this release includes references to
Adjusted EBITDA, Adjusted Diluted Earnings Per Share, and a
covenant under our credit agreement with Wells Fargo Bank, N.A.:
Net Consolidated Leverage Ratio. 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 these measures. The Company's
calculation of its Net Consolidated Leverage Ratio is in accordance
with its credit agreement, and such calculation, as well as
the Company's calculation of Adjusted EBITDA and Adjusted Diluted
Earnings Per Share, 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 may not be comparable with similarly
labeled amounts disclosed by others.
Investors: Douglas M. Lane, CFA,
douglaslane@tupperware.com, (321) 503-9640
Media: media@tupperware.com
|
Summary Preliminary
Financial Statements
|
|
TUPPERWARE BRANDS
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(Unaudited,
Preliminary)
|
|
|
|
|
As Adjusted
(a)
|
|
|
|
As Adjusted
(a)
|
|
14 weeks
ended
|
|
13 weeks
ended
|
|
53 weeks
ended
|
|
52 weeks
ended
|
(In millions, except
per share amounts)
|
December 31,
2022
|
|
December 25,
2021
|
|
December 31,
2022
|
|
December 25,
2021
|
Net sales
|
$
313.7
|
|
$
390.1
|
|
$
1,305.6
|
|
$
1,601.7
|
Cost of products
sold
|
117.2
|
|
149.8
|
|
469.2
|
|
535.7
|
Gross
profit
|
196.5
|
|
240.3
|
|
836.4
|
|
1,066.0
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
175.2
|
|
208.8
|
|
742.9
|
|
829.0
|
Re-engineering and
impairment charges
|
15.6
|
|
5.1
|
|
28.6
|
|
14.8
|
Loss (gain) on disposal
of assets
|
1.5
|
|
(23.7)
|
|
1.8
|
|
(34.2)
|
Impairment of goodwill
and intangible assets
|
—
|
|
8.1
|
|
—
|
|
8.1
|
Operating
income
|
4.2
|
|
42.0
|
|
63.1
|
|
248.3
|
|
|
|
|
|
|
|
|
Loss on debt
extinguishment
|
—
|
|
11.8
|
|
—
|
|
19.9
|
Interest
expense
|
12.8
|
|
5.5
|
|
31.7
|
|
35.2
|
Interest
income
|
(2.5)
|
|
(0.2)
|
|
(5.7)
|
|
(1.1)
|
Other expense (income),
net
|
4.9
|
|
(2.5)
|
|
11.5
|
|
(1.7)
|
(Loss) income from
continuing operations before income taxes
|
(11.0)
|
|
27.4
|
|
25.6
|
|
196.0
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
24.2
|
|
12.0
|
|
54.0
|
|
43.8
|
(Loss) income from
continuing operations
|
(35.2)
|
|
15.4
|
|
(28.4)
|
|
152.2
|
|
|
|
|
|
|
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
(Loss) income from
discontinued operations before income taxes
|
(0.9)
|
|
(2.3)
|
|
(7.1)
|
|
4.6
|
(Loss) gain on held for
sale assets and dispositions
|
(1.1)
|
|
13.6
|
|
20.3
|
|
(133.5)
|
(Benefit) provision for
income taxes
|
(1.5)
|
|
4.1
|
|
(1.0)
|
|
6.5
|
(Loss) income on
discontinued operations
|
(0.5)
|
|
7.2
|
|
14.2
|
|
(135.4)
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
(35.7)
|
|
$
22.6
|
|
$
(14.2)
|
|
$
16.8
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic (loss) earnings
from continuing operations - per share
|
$
(0.79)
|
|
$
0.32
|
|
$
(0.62)
|
|
$
3.08
|
Basic (loss) earnings
from discontinued operations - per share
|
(0.01)
|
|
0.15
|
|
0.31
|
|
(2.74)
|
Basic (loss) earnings
per share - Total
|
$
(0.80)
|
|
$
0.47
|
|
$
(0.31)
|
|
$
0.34
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings
from continuing operations - per share
|
$
(0.79)
|
|
$
0.30
|
|
$
(0.62)
|
|
$
2.87
|
Diluted (loss) earnings
from discontinued operations - per share
|
(0.01)
|
|
0.13
|
|
0.31
|
|
(2.55)
|
Diluted (loss) earnings
per share - Total
|
$
(0.80)
|
|
$
0.43
|
|
$
(0.31)
|
|
$
0.32
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
|
|
Basic weighted-average
shares
|
44.5
|
|
48.9
|
|
45.6
|
|
49.4
|
Diluted
weighted-average shares
|
44.5
|
|
52.3
|
|
45.6
|
|
53.0
|
|
(a) Please see
"Preliminary Results, Prior Period Misstatements and Material
Weakness in Internal Controls Over Financial Reporting"
above.
|
|
|
|
TUPPERWARE BRANDS
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited,
Preliminary)
|
|
|
As of
|
|
|
|
As Adjusted
(a)
|
(In millions, except
share amounts)
|
December 31,
2022
|
|
December 25,
2021
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
110.1
|
|
$
267.2
|
Other current
assets
|
320.9
|
|
379.3
|
Total current
assets
|
431.0
|
|
646.5
|
|
|
|
|
Property, plant and
equipment, net
|
136.9
|
|
155.8
|
Other assets
|
384.3
|
|
431.3
|
Total
assets
|
$
952.2
|
|
$
1,233.6
|
|
|
|
|
Liabilities And
Shareholders' Equity
|
|
|
|
Current debt and
finance lease obligations
|
$
18.0
|
|
$
8.9
|
Other current
liabilities
|
310.1
|
|
541.1
|
Total current
liabilities
|
328.1
|
|
550.0
|
|
|
|
|
Long-term debt and
finance lease obligations
|
687.4
|
|
700.5
|
Other
liabilities
|
124.2
|
|
196.8
|
Total
liabilities
|
1,139.7
|
|
1,447.3
|
|
|
|
|
Total shareholders'
equity
|
(187.5)
|
|
(213.7)
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
952.2
|
|
$
1,233.6
|
|
(a) Please see
"Preliminary Results, Prior Period Misstatements and Material
Weakness in Internal Controls Over Financial Reporting"
above.
|
|
|
|
TUPPERWARE BRANDS
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited,
Preliminary)
|
|
|
|
|
As Adjusted
(a)
|
|
53 weeks
ended
|
|
52 weeks
ended
|
(In
millions)
|
December 31,
2022
|
|
December 25,
2021
|
Operating
Activities
|
|
|
|
Net cash (used in)
provided by operating activities
|
(53.2)
|
|
111.4
|
Investing
Activities
|
|
|
|
Capital
expenditures
|
(33.0)
|
|
(35.1)
|
Proceeds from disposal
of property, plant and equipment
|
3.8
|
|
53.3
|
Net cash (used in)
provided by investing activities
|
(29.2)
|
|
18.2
|
Financing
Activities
|
|
|
|
Repayments of term
loan
|
(9.5)
|
|
(275.0)
|
Repayments of previous
revolver facility
|
—
|
|
(415.9)
|
Net proceeds from
issuance of term loan
|
—
|
|
398.5
|
Borrowings on revolver
facility
|
246.0
|
|
377.0
|
Repayment of revolver
facility
|
(225.7)
|
|
(65.0)
|
Debt issuance costs
payment
|
(2.8)
|
|
(9.9)
|
Finance lease
repayments
|
(1.6)
|
|
(1.4)
|
Common stock
repurchase
|
(75.0)
|
|
(25.0)
|
Cash payments of
employee withholding tax for stock awards
|
(1.9)
|
|
(3.0)
|
Proceeds from exercise
of stock options
|
—
|
|
0.5
|
Net cash used in
financing activities
|
(70.5)
|
|
(19.2)
|
Discontinued
Operations
|
|
|
|
Net cash used in
operating activities
|
(3.5)
|
|
(18.1)
|
Net cash provided by
operating activities
|
6.9
|
|
41.6
|
Net cash provided by
discontinued operations
|
3.4
|
|
23.5
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(4.1)
|
|
(10.6)
|
Net change in cash,
cash equivalents and restricted cash
|
(153.6)
|
|
123.3
|
Cash, cash equivalents
and restricted cash at beginning of year
|
273.8
|
|
150.5
|
Cash, cash equivalents
and restricted cash at end of period
|
$
120.2
|
|
$
273.8
|
|
(a) Please see
"Preliminary Results, Prior Period Misstatements and Material
Weakness in Internal Controls Over Financial Reporting"
above.
|
Segment Information
The Company manufactures and distributes a broad portfolio of
products, primarily through independent direct sales force members.
Certain operating segments have been aggregated based upon
consistency of economic substance, geography, products, production
process, class of customers and distribution method.
|
|
|
|
|
|
|
|
|
|
|
Change excluding the
foreign
exchange impact
|
|
Percent of total
|
(In
millions)
|
14 weeks
ended
|
|
As Adjusted
(a)
13 weeks
ended
|
|
Change
|
|
Foreign
exchange
impact
|
|
|
14 weeks
ended
|
|
As Adjusted
(a)
13 weeks
ended
|
Dec 31,
2022
|
|
Dec 25,
2021
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
Dec 31,
2022
|
|
Dec 25,
2021
|
Asia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
77.9
|
|
$
112.9
|
|
$
(35.1)
|
|
(31) %
|
|
$
(17.8)
|
|
$
(17.3)
|
|
(18) %
|
|
25 %
|
|
29 %
|
Segment
profit
|
$
1.6
|
|
$
19.6
|
|
$
(18.0)
|
|
(92) %
|
|
$
(6.0)
|
|
$
(12.0)
|
|
(88) %
|
|
2 %
|
|
17 %
|
Segment profit as
percent of net sales
|
2.1 %
|
|
17.4 %
|
|
N/A
|
|
(15.3) pp
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
75.0
|
|
$
106.5
|
|
$
(31.5)
|
|
(30) %
|
|
$
(10.9)
|
|
$
(20.6)
|
|
(22) %
|
|
24 %
|
|
27 %
|
Segment
profit
|
$
5.3
|
|
$
18.3
|
|
$
(13.0)
|
|
(71) %
|
|
$
(2.3)
|
|
$
(10.7)
|
|
(67) %
|
|
7 %
|
|
17 %
|
Segment profit as
percent of net sales
|
7.1 %
|
|
17.2 %
|
|
N/A
|
|
(10.1) pp
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
87.4
|
|
$
108.3
|
|
$
(20.8)
|
|
(19) %
|
|
$
0.8
|
|
$
(21.6)
|
|
(20) %
|
|
28 %
|
|
28 %
|
Segment
profit
|
$
10.0
|
|
$
12.5
|
|
$
(2.5)
|
|
(20) %
|
|
$
0.2
|
|
$
(2.7)
|
|
(21) %
|
|
11 %
|
|
12 %
|
Segment profit as
percent of net sales
|
11.4 %
|
|
11.5 %
|
|
N/A
|
|
(0.1) pp
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South
America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
73.4
|
|
$
62.4
|
|
$
11.0
|
|
18 %
|
|
$
(3.0)
|
|
$
14.0
|
|
24 %
|
|
23 %
|
|
16 %
|
Segment
profit
|
$
13.6
|
|
$
12.9
|
|
$
0.8
|
|
6 %
|
|
$
(0.7)
|
|
$
1.4
|
|
12 %
|
|
19 %
|
|
21 %
|
Segment profit as
percent of net sales
|
18.5 %
|
|
20.7 %
|
|
N/A
|
|
(2.2) pp
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net
sales
|
$ 313.7
|
|
$
390.1
|
|
$
(76.4)
|
|
(21) %
|
|
$
(30.9)
|
|
$
(45.5)
|
|
(14) %
|
|
N/A
|
|
N/A
|
___________________
N/A - not
applicable
|
+ - change greater than
±100%
|
|
(a) Please see
"Preliminary Results, Prior Period Misstatements and Material
Weakness in Internal Controls Over Financial Reporting"
above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of total
|
(In
millions)
|
53 weeks
ended
|
|
As Adjusted
(a)
52 weeks
ended
|
|
Change
|
|
|
|
|
53 weeks
ended
|
|
As Adjusted
(a)
52 weeks
ended
|
Dec 31,
2022
|
|
Dec 25,
2021
|
|
Amount
|
|
Percent
|
Foreign
exchange
impact
|
|
Amount
|
|
Percent
|
Dec 31,
2022
|
|
Dec 25,
2021
|
Asia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 352.3
|
|
$
460.9
|
|
$
(108.6)
|
|
(24) %
|
|
$
(27.4)
|
|
$
(81.1)
|
|
(19) %
|
|
27 %
|
|
29 %
|
Segment
profit
|
$
36.2
|
|
$
106.9
|
|
$
(70.7)
|
|
(66) %
|
|
$
(4.9)
|
|
$
(65.8)
|
|
(65) %
|
|
24 %
|
|
35 %
|
Segment profit as
percent of net sales
|
10.3 %
|
|
23.2 %
|
|
N/A
|
|
(12.9) pp
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 297.6
|
|
$
433.5
|
|
$
(135.8)
|
|
(31) %
|
|
$
(45.3)
|
|
$
(90.6)
|
|
(23) %
|
|
23 %
|
|
27 %
|
Segment
profit
|
$
19.4
|
|
$
83.9
|
|
$
(64.5)
|
|
(77) %
|
|
$
(9.3)
|
|
$
(55.3)
|
|
(74) %
|
|
13 %
|
|
27 %
|
Segment profit as
percent of net sales
|
6.5 %
|
|
19.4 %
|
|
N/A
|
|
(0.1) pp
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 379.9
|
|
$
451.2
|
|
$
(71.3)
|
|
(16) %
|
|
$
(0.7)
|
|
$
(70.7)
|
|
(16) %
|
|
29 %
|
|
28 %
|
Segment
profit
|
$
45.2
|
|
$
57.2
|
|
$
(12.0)
|
|
(21) %
|
|
$
0.1
|
|
$
(10.2)
|
|
(18) %
|
|
29 %
|
|
18 %
|
Segment profit as
percent of net sales
|
11.9 %
|
|
12.7 %
|
|
N/A
|
|
(0.8) pp
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South
America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 275.8
|
|
$
256.1
|
|
$
19.6
|
|
8 %
|
|
$
(5.7)
|
|
$
25.4
|
|
10 %
|
|
21 %
|
|
16 %
|
Segment
profit
|
$
52.5
|
|
$
61.7
|
|
$
(9.2)
|
|
(15) %
|
|
$
(0.8)
|
|
$
(8.5)
|
|
(14) %
|
|
34 %
|
|
20 %
|
Segment profit as
percent of net sales
|
19.0 %
|
|
24.1 %
|
|
N/A
|
|
(5.1) pp
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net
sales
|
$
1,305.6
|
|
$ 1,601.7
|
|
$
(296.1)
|
|
(18) %
|
|
$
(79.1)
|
|
$
(217.0)
|
|
(14) %
|
|
N/A
|
|
N/A
|
____________________
N/A - not
applicable
|
+ - change greater than
±100%
|
|
(a) Please see
"Preliminary Results, Prior Period Misstatements and Material
Weakness in Internal Controls Over Financial Reporting"
above.
|
Sales Force Statistics
Sales force statistics shown below are collected by the Company
and, in some cases, provided by distributors and sales force.
Active sales force is defined as the average number of sellers
ordering in each cycle over the course of the quarter. Constant
currency changes, or changes excluding foreign exchange impact, are
measured by comparing current year results with those of the prior
year, translated at the current year's foreign exchange rates.
|
Net
Sales
|
|
Active Sales
Force
|
|
Fourth Quarter
2022
versus
Fourth Quarter
2021
|
|
|
|
|
|
|
|
|
December 31,
2022
|
|
December 25,
2021
|
|
|
Segments
|
Change
%
|
|
Change
excluding foreign
exchange impact
%
|
|
Count
|
|
Count
|
|
Change
%
|
Asia Pacific
|
(31) %
|
|
(18) %
|
|
36,736
|
|
52,153
|
|
(30) %
|
Europe
|
(30) %
|
|
(22) %
|
|
58,674
|
|
82,766
|
|
(29) %
|
North
America
|
(19) %
|
|
(20) %
|
|
49,181
|
|
69,735
|
|
(29) %
|
South
America
|
18 %
|
|
24 %
|
|
139,434
|
|
140,009
|
|
— %
|
Total
|
(21) %
|
|
(14) %
|
|
284,025
|
|
344,663
|
|
(18) %
|
|
|
|
GAAP to Non-GAAP
Financial Measures Reconciliation
|
|
Preliminary GAAP to
Non-GAAP Earnings Per Share Reconciliation
|
|
|
|
|
As Adjusted
(a)
|
|
|
|
As Adjusted
(a)
|
|
14 weeks
ended
|
|
13 weeks
ended
|
|
53 weeks
ended
|
|
52 weeks
ended
|
(In millions, except
per share amounts)
|
December 31,
2022
|
|
December 25,
2021
|
|
December 31,
2022
|
|
December 25,
2021
|
(Loss) income from
continuing operations
|
$
(35.2)
|
|
$
15.4
|
|
$
(28.4)
|
|
$
152.2
|
|
|
|
|
|
|
|
|
Re-engineering
charges
|
15.6
|
|
5.1
|
|
28.6
|
|
14.8
|
Loss on debt
extinguishment
|
—
|
|
11.8
|
|
—
|
|
19.9
|
Loss (gain) on disposal
of assets
|
1.5
|
|
(23.7)
|
|
1.8
|
|
(34.2)
|
Impairment
expense
|
—
|
|
8.1
|
|
—
|
|
8.1
|
Exit costs (benefits)
and other
|
1.3
|
|
0.8
|
|
8.1
|
|
9.9
|
Consulting
|
0.2
|
|
0.3
|
|
3.2
|
|
1.5
|
Foreign currency
hyperinflation
|
4.3
|
|
1.4
|
|
13.6
|
|
2.0
|
Adjustments before
income taxes
|
22.9
|
|
3.8
|
|
55.3
|
|
22.0
|
Adjusted (loss) income
from continuing operations before income taxes
|
(12.3)
|
|
19.2
|
|
26.9
|
|
174.2
|
|
|
|
|
|
|
|
|
Adjustment to the
(benefit) provision for income taxes
|
(1.4)
|
|
(1.6)
|
|
4.4
|
|
(1.2)
|
Net
adjustments
|
$
24.3
|
|
$
5.4
|
|
$
50.9
|
|
$
23.2
|
|
|
|
|
|
|
|
|
Adjusted (loss) income
from continuing operations
|
(10.9)
|
|
20.8
|
|
22.5
|
|
175.4
|
|
|
|
|
|
|
|
|
Basic weighted-average
shares
|
44.5
|
|
48.9
|
|
45.6
|
|
49.4
|
Diluted
weighted-average shares
|
46.9
|
|
52.3
|
|
48.5
|
|
53.0
|
|
|
|
|
|
|
|
|
Adjusted basic (loss)
earnings per share from continuing operations
|
$
(0.24)
|
|
$
0.43
|
|
$
0.49
|
|
$
3.55
|
Adjusted diluted (loss)
earnings per share from continuing operations
|
$
(0.24)
|
|
$
0.39
|
|
$
0.46
|
|
$
3.31
|
|
(a) Please see
"Preliminary Results, Prior Period Misstatements and Material
Weakness in Internal Controls Over Financial Reporting"
above.
|
|
|
|
Preliminary Net
Income to EBITDA Reconciliation,
|
Net Income to Debt
Covenant EBITDA Reconciliation and Total Debt to Debt Covenant
EBITDA Ratio (1)
|
|
|
53 weeks
ended
|
|
14 weeks
ended
|
|
As Adjusted
(a)
13 weeks
ended
|
|
As Adjusted
(a)
52 weeks
ended
|
(In
millions)
|
December 31,
2022
|
|
December 31,
2022
|
|
September
24,
2022
|
|
June 25,
2022
|
|
March 26,
2022
|
|
December 25,
2021
|
(Loss) income from
continuing operations
|
$
(28.4)
|
|
$
(35.2)
|
|
$
(3.0)
|
|
$
5.6
|
|
$
4.2
|
|
$
152.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
31.7
|
|
12.8
|
|
8.3
|
|
6.0
|
|
4.6
|
|
35.2
|
Provision for income
taxes
|
54.0
|
|
24.2
|
|
9.7
|
|
15.4
|
|
4.7
|
|
43.8
|
Depreciation and
amortization
|
36.1
|
|
7.2
|
|
9.2
|
|
9.0
|
|
10.7
|
|
39.7
|
Adjusted EBITDA -
from continuing operations
|
93.4
|
|
9.0
|
|
24.2
|
|
36.0
|
|
24.2
|
|
270.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash impairment
charges or asset write-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8.1
|
Other adjustments per
Credit Agreement
|
23.4
|
|
6.6
|
|
4.4
|
|
7.5
|
|
4.9
|
|
14.1
|
Other non-cash
extraordinary, unusual or non-recurring losses
|
29.4
|
|
15.6
|
|
4.5
|
|
3.7
|
|
5.6
|
|
41.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
re-engineering charges
|
(18.8)
|
|
(8.0)
|
|
(4.1)
|
|
(4.4)
|
|
(2.3)
|
|
(20.5)
|
Extraordinary, unusual
or non-recurring losses (gains)
|
1.8
|
|
1.5
|
|
0.7
|
|
2.0
|
|
(0.4)
|
|
(34.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA -
discontinued operations
|
$
15.1
|
|
$
(1.4)
|
|
$
22.3
|
|
$
(3.6)
|
|
$
(2.2)
|
|
$
(126.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on disposal
of assets
|
$
20.3
|
|
$
(1.1)
|
|
$
22.6
|
|
$
1.4
|
|
$
(2.6)
|
|
$
(133.5)
|
Total Adjusted
EBITDA (non-GAAP, per debt covenant)
|
$
124.0
|
|
$
24.4
|
|
$
29.4
|
|
$
39.8
|
|
$
32.4
|
|
$
287.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
debt
|
$
705.4
|
|
|
|
|
|
|
|
|
|
|
Unrestricted cash and
cash equivalents
|
$
(100.0)
|
|
|
|
|
|
|
|
|
|
|
Consolidated total debt
less unrestricted cash and cash equivalents
|
$
605.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Leverage Ratio
|
4.88
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts and
calculations are based on the definitions and provisions of the
Company's Credit Agreement and, where applicable, are based on the
trailing four quarter amounts. "Consolidated Leverage Ratio" is
calculated as defined in the Credit Agreement.
|
|
(a) Please see
"Preliminary Results, Prior Period Misstatements and Material
Weakness in Internal Controls Over Financial Reporting"
above.
|
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SOURCE Tupperware Brands Corporation