UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the 13 weeks ended March 29, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 1-11657
__________________
TUPPERWARE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-4062333
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 2353, Orlando, Florida 32802
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 826-5050
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes___X___ No_______
As of May 6, 1997, 61,588,706 shares of the Common Stock,
$0.01 par value, of the Registrant were outstanding.
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
a) Financial Statements of Registrant
Page
Index Number
Consolidated Statement of Income
(Unaudited) for the 13 week periods ended
March 29, 1997 and March 30, 1996.............. 2
Consolidated Balance Sheet
(Unaudited) as of March 29, 1997 and
December 28, 1996.............................. 3
Consolidated Statement of Cash Flows
(Unaudited) for the 13 week periods
ended March 29, 1997 and March 30, 1996........ 5
Notes to Consolidated Financial
Statements (Unaudited)......................... 6
The financial statements of the Registrant included herein have
been prepared, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (the
Commission). Although certain information normally included in
financial statements prepared in accordance with generally
accepted accounting principles has been condensed or omitted,
the Registrant believes that the disclosures are adequate to
make the information presented not misleading. It is suggested
that these consolidated financial statements be read in
conjunction with the financial statements and the notes thereto
included in the Annual Report on Form 10-K of the Registrant for
its fiscal year ended December 28, 1996.
The consolidated financial statements included herein reflect
all adjustments, consisting only of normal recurring items,
which, in the opinion of management, are necessary to present a
fair statement of the results for the interim periods
presented.
The results for interim periods are not necessarily indicative
of trends or results to be expected for a full year.
- 1 -
<PAGE>
<TABLE>
TUPPERWARE CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<CAPTION>
13 Weeks Ended
--------------------------
March 29, March 30,
1997 1996
------------ ------------
(In millions, except per share data)
<S> <C> <C>
Net sales............................... $ 315.3 $ 329.0
-------- --------
Costs and expenses:
Cost of products sold................. 114.0 120.3
Delivery, sales, and
administrative expense.............. 160.5 166.3
Interest expense...................... 4.7 1.0
Interest income....................... (0.8) (1.4)
Other expense (income)................ 2.8 (0.5)
-------- --------
Total costs and expenses........... 281.2 285.7
-------- --------
Income before income taxes.............. 34.1 43.3
Provision for income taxes.............. 9.2 11.7
-------- --------
Net income.............................. $ 24.9 $ 31.6
======== ========
Net income (1996 pro forma) per common
and common equivalent share............ $ 0.40 $ 0.46
======== ========
Average number (1996 pro forma) of common
and common equivalent shares
outstanding............................ 63.0 63.1
======== ========
See accompanying Notes to Consolidated Financial Statements
(Unaudited).
</TABLE>
- 2 -
<PAGE>
<TABLE>
TUPPERWARE CORPORATION
CONSOLIDATED BALANCE SHEET
ASSETS
(UNAUDITED)
<CAPTION>
March 29, December 28,
1997 1996
--------- ----------
(In millions)
<S> <C> <C>
Cash and cash equivalents............ $ 43.5 $ 53.0
Accounts receivable.................. 147.6 147.2
Less allowances for
doubtful accounts................ (25.6) (25.9)
--------- ---------
122.0 121.3
Inventories.......................... 245.3 252.8
Deferred income tax benefits......... 36.4 35.1
Prepaid expenses and other assets.... 60.2 61.0
--------- ---------
Total current assets............. 507.4 523.2
--------- ---------
Deferred income tax benefits......... 58.0 56.4
Property, plant, and equipment....... 949.0 974.2
Less accumulated depreciation...... (635.7) (643.2)
--------- ---------
313.3 331.0
Long-term receivables, net of
allowances of $39.5 million at
March 29, 1997, and $40.2
million at December 28, 1996....... 47.3 46.6
Other assets ....................... 19.4 21.3
--------- ---------
Total assets..................... $ 945.4 $ 978.5
========= =========
See accompanying Notes to Consolidated Financial Statements
(Unaudited).
</TABLE>
- 3 -
<PAGE>
<TABLE>
TUPPERWARE CORPORATION
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(UNAUDITED)
<CAPTION>
March 29, December 28,
1997 1996
------------- ------------
(Dollars in millions, except per share amounts)
<S> <C> <C>
Accounts payable................... $ 64.3 $ 95.6
Short-term borrowings and current
portion of long-term debt........ 33.4 25.3
Accrued liabilities................ 233.0 246.1
------- -------
Total current liabilities...... 330.7 367.0
------- -------
Long-term debt..................... 256.9 215.3
Accrued postretirement
benefit cost..................... 37.4 36.9
Other liabilities.................. 51.1 53.8
Shareholders' equity:
Preferred stock, $0.01 par value,
200,000,000 shares authorized;
none issued................... - -
Common stock, $0.01 par value,
600,000,000 shares authorized;
62,367,289 shares issued...... 0.6 0.6
Capital surplus.................. 19.2 19.1
Retained earnings................ 429.0 418.2
Treasury Stock, 778,583 shares
at cost....................... (33.1) -
Unearned portion of restricted
stock issued for future
service (3.9) (3.9)
Cumulative foreign currency
adjustments................... (142.5) (128.5)
------- -------
Total shareholders' equity..... 269.3 305.5
------- -------
Total liabilities and
shareholders' equity......... $945.4 $978.5
======= =======
See accompanying Notes to Consolidated Financial Statements
(Unaudited).
</TABLE>
- 4 -
<PAGE>
<TABLE>
TUPPERWARE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
13 Weeks Ended
---------------------------
March 29, March 30,
1997 1996
------------- -------------
(In millions)
<S> <C> <C>
Cash flows from operating activities:
Net income............................. $ 24.9 $ 31.6
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation....................... 16.3 14.9
Loss on sale of assets............. - 1.3
Foreign exhange loss, net.......... 0.3 0.2
Changes in assets and liabilities:
Increase in accounts receivable.... (5.4) (25.0)
Increase in inventory.............. (1.5) (5.7)
Decrease in accounts payable and
accrued liabilities.............. (31.8) (19.9)
Increase (decrease) in income
taxes payable.................... 3.7 (6.4)
(Increase) decrease in net deferred
income taxes..................... (3.8) 7.0
Other, net......................... (4.7) (2.9)
-------- --------
Net cash used in operating
activities....................... (2.0) (4.9)
-------- --------
Cash flows from investing activities:
Capital expenditures................... (10.4) (15.8)
-------- --------
Net cash used in investing
activities...................... (10.4) (15.8)
-------- --------
Cash flows from financing activities:
Net transactions with Premark
other than special dividend.......... - 28.9
Dividend payments to shareholders...... (13.7) -
Proceeds from exercise of
stock options........................ 1.6 -
Payments to acquire treasury stock..... (34.6) -
Net increase (decrease) in short-term
debt................................. 52.9 (15.8)
-------- --------
Net cash provided by financing
activities...................... 6.2 13.1
-------- --------
Effect of exchange rate changes on cash
and cash equivalents................... (3.3) (2.3)
-------- --------
Net decrease in cash and
cash equivalents....................... (9.5) (9.9)
Cash and cash equivalents at beginning
of year................................ 53.0 97.3
-------- --------
Cash and cash equivalents at end
of period.............................. $ 43.5 $ 87.4
======== ========
See accompanying Notes to Consolidated Financial Statements
(Unaudited).
</TABLE>
- 5 -
<PAGE>
TUPPERWARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and
therefore do not include all footnotes necessary for a fair
presentation of financial position, results of operations, and changes
in financial position in conformity with generally accepted accounting
principles. Certain prior year amounts have been reclassified to conform
with the current year's presentation. In the opinion of management,
the unaudited consolidated financial statements include all adjustments,
consisting only of normal recurring items, necessary for a fair presentation
of financial position and results of operations. The results of operations
of any interim period are not necessarily indicative of the results that may
be expected for a full fiscal year.
Note 2: Inventories
Inventories, by component, are summarized as follows (in millions):
<TABLE>
<CAPTION>
March 29, December 28,
1997 1996
----------- -----------
<S> <C> <C>
Finished goods.................. $ 118.4 $ 127.5
Work in process................. 48.0 49.0
Raw materials and supplies...... 78.9 76.3
-------- --------
Total inventories $ 245.3 $ 252.8
======== ========
</TABLE>
<PAGE>
Note 3: Distribution of Tupperware
On November 1, 1995, Premark International, Inc.'s (Premark) board of
directors authorized Premark management to proceed with a plan to
establish the Tupperware business (Tupperware, the company) as an
independent company through a stock distribution to Premark's
shareholders (the Distribution). The Distribution was effected
on May 31, 1996, through a 1-for-1 distribution of stock, which was
tax free to Premark's shareholders pursuant to a ruling received from
the Internal Revenue Service. As part of this transaction, on May 24, 1996,
Dart Industries Inc. (Dart), a wholly-owned subsidiary of the company,
paid a $284.9 million special dividend to Premark (the Dividend Payment).
The Dividend Payment was funded through available cash and a portion of the
$268.0 million that was borrowed under the company's $300 million
multicurrency credit agreement that was entered into on May 17, 1996.
Pro forma net income per common and common equivalent share is
calculated as if the Distribution had occurred at the beginning of
fiscal 1996 and assumes that Tupperware used $25.0 million of
available cash and $271.9 million of additional borrowings to fund
both the Dividend Payment of $284.9 million and $12.0 million for the
amount that Tupperware paid in July 1996 related to the quarterly
dividend declared on Premark's common stock on May 1, 1996. Pro forma
net income is based on the company's historical net income for the 13
week period ended March 30, 1996. Historical net income is
adjusted for $4.2 million of additional interest expense, net of
$1.6 million of tax benefits, related to the increase in borrowings
at an assumed weighted average interest rate of 6.2 percent.
Pro forma net income per share includes pro forma net income divided
by an assumed 63.1 million weighted average common and common
equivalent shares.
- 6 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following is a discussion of the results of operations for
the 13 weeks ended March 29, 1997, compared with the 13 weeks
ended March 30, 1996, and changes in financial condition during
the 13 weeks ended March 29, 1997.
The Distribution
As described in Note 3 to the consolidated financial statements,
Tupperware was established as an independent company in May 1996.
Net Sales and Net Income
Net sales for the first quarter of 1997 decreased $13.7
million, or 4.2 percent, to $315.3 million from $329.0 million in
the first quarter of 1996. Net income in 1997 was $24.9 million,
which was a $4.1 million or 14.2 percent decrease from 1996 pro
forma net income of $29.0 million. Significant improvement in
operations in Europe along with a smaller increase in Latin
America were more than offset by weaker results in the United
States and Asia Pacific. Foreign exchange had a $20.7 million or
7 percentage point negative impact on the sales comparison and a
$2.8 million or 9 percentage point negative impact on the net
income comparison. First quarter 1996 net income prior to the
pro forma adjustment was $31.6 million.
Costs and Expenses
The cost of products sold in relation to sales decreased to 36.2
percent in the first quarter of 1997 from 36.6 percent in the comparable
1996 period. The decrease reflects a greater proportion in 1997 than
1996 of sales in Europe, which have higher margins.
Delivery, sales, and administrative expense as a percentage of
sales was 50.9 percent in 1997 compared with 50.5 percent in the
first quarter of 1996. The slightly higher 1997 percentage reflects the
fact that the expenses in the United States and Asia Pacific did
not decrease as significantly as sales. An additional factor in
the increase was higher costs incurred in connection with the new
markets of China and India.
Net Interest Expense
In the first quarter of 1997, the company incurred net interest
expense of $3.9 million compared with net interest income of $0.4
million in the first quarter of 1996. In connection with the
Distribution, Dart paid Premark a special dividend of $284.9 million
on May 24, 1996. The company incurred a significant amount of
incremental borrowings in order to fund the majority of the special
dividend, which led to the net interest expense incurred in 1997.
Tax Rate
The effective tax rates for the first quarters of both 1997 and
1996 were 27.0 percent. A lower 1997 benefit from repatriating
foreign earnings was offset by a lower foreign effective tax rate
resulting from the reduction of deferred tax valuation allowances
in certain countries. For these countries it is now management's
best estimate that there is a greater than 50 percent probability that
the benefit of the assets will be realized in the associated tax returns.
The 25.5 percent effective rate for all of 1996 was lower than the first
quarters of 1997 and 1996, reflecting the recognition of the benefit of
a capital loss carryforward in the fourth quarter of 1996.
Regional Results (dollars in millions)
Europe
<TABLE>
<CAPTION>
Foreign
exchange Percent of
Increase impact total
1997 1996 Dollar Percent Dollar pp 1997 1996
------ ------ ------ ------- ------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $154.9 $146.8 $ 8.1 6% $(15.1) (12) 49% 45%
Operating
profit 38.5 30.2 8.3 27 (3.0) (14) 90 64
</TABLE>
The quarterly increase in sales in Europe primarily reflects
improvement in volume in Germany, which had more sellers as well
as a higher activity rate. First quarter 1996 volume in Germany
was negatively affected by weak economic conditions and low sales
during an important promotional period. Italy, South Africa, Greece,
Scandinavia, Belgium, and Austria also had higher sales in 1997 as
volume improved. Only partially offsetting these improvements
were lower sales in the United Kingdom and France. The
improvement in operating profit reflects the net improvement in
sales volume, along with more efficient promotional spending in
Germany. The negative impact of foreign exchange on the
comparisons was from the dollar's strength against the currencies
throughout the region.
<PAGE>
Asia Pacific
<TABLE>
<CAPTION>
Foreign
exchange Percent of
Decrease impact total
1997 1996 Dollar Percent Dollar pp 1997 1996
------ ------ ------ ------- ------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 65.6 $ 76.2 $(10.6) (14)% $ (5.6) (7) 21% 23%
Operating
profit 2.5 9.3 (6.8) (73) (0.8) (3) 6 20
</TABLE>
The decrease in Asia Pacific sales was from lower volume in Japan
and the Philippines, due to fewer active sellers, which was only
partially offset by higher volume in Korea. The lower operating profit
followed from the decreased sales volume along with a lower gross
margin due to lower production, as well as an increase in costs
associated with the new markets of China and India. The negative
impact of foreign exchange on the comparisons for the region was
primarily from Japan and Korea.
<PAGE>
Latin America
<TABLE>
<CAPTION> Foreign
exchange Percent of
Increase impact total
1997 1996 Dollar Percent Dollar pp 1997 1996
------ ------ ------ ------- ------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 63.2 $ 62.2 $ 1.0 1% - - 20% 19%
Operating
profit 9.6 9.2 0.4 4 - - 22 20
</TABLE>
In Latin America, the increase in sales reflects higher volume in
Mexico, which was mostly offset by lower volume in Argentina. In
Mexico, the improvement was from a higher number of active
sellers, reflecting recruiting and activity incentives.
In Argentina, the sales force increased, but its productivity
and activity levels fell. The sales force in Brazil increased
significantly, but lower productivity resulting from the fast
pace of expansion of the business over the past few years largely
offset the impact of the higher number of sellers. The modest increase
in operating profit reflects the changes in sales volume partially offset by
higher promotion and selling costs incurred in Brazil in an effort
to improve sales force productivity, as well as the negative impact of
foreign exchange transaction losses.
<PAGE>
United States
<TABLE>
<CAPTION>
Percent of
Decrease total
1997 1996 Dollar Percent 1997 1996
------ ------ ------ ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 31.6 $ 43.8 $(12.2) (28)% 10% 13%
Operating
loss (7.8) (1.9) (5.9) (298) nm nm
</TABLE>
The lower U.S. sales reflect the impact of implementing higher
sales force standards in the latter half of 1996. The new
standards led to a smaller sales force, along with lower
productivity compared with the first quarter of 1996.
New programs to increase recruiting and activity have
recently been implemented. These programs include a cash incentive
for recruiting and a two-tiered vehicle program. The increase
in the operating loss in 1997 reflects the impact of lower sales,
along with higher per unit costs due to the lower volume. Additionally,
although delivery, sales, and administrative expense was lower in
the first quarter of 1997 compared with the first quarter of 1996,
it represented a higher percentage of sales in 1997.
<PAGE>
Financial Condition
Working capital was $176.7 million as of March 29, 1997, compared
with $156.2 million as of the end of 1996. The increase reflects
the seasonal reduction of accounts payable along with lower
accruals for promotions and the acceleration of payments to reduce
exposure to fluctuations in foreign exchange.
Net cash used in operating activities in the first quarter of
1997 was $2.0 million. Net income before depreciation was offset
primarily by the decrease in accounts payable addressed above.
The $10.4 million of cash used in investing activities was for
capital expenditures, primarily for new molds.
As of March 29, 1997, the $300 million available under the
company's multicurrency credit facility, through commercial paper
borrowings and through $180.3 million of foreign uncommitted
lines of credit, along with cash generated by operating
activities, are expected to be adequate to finance any additional
working capital needs and capital expenditures.
In the first quarter of 1997, the company began making share repurchases
under its program announced in 1996. During the quarter, the company
repurchased 800,000 shares of its common stock at an average cost of
approximately $43 per share.
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
(11) A statement of computation of per share earnings
is filed as an exhibit to this report.
(27) A Financial Data Schedule for the first quarter of
1997 is filed as an exhibit to this report.
(b) Reports on Form 8-K
During the quarter, the Registrant filed one current
report on Form 8-K:
On February 28, 1997, regarding risks and uncertainties.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
TUPPERWARE CORPORATION
By: Thomas M. Roehlk
-------------------------
Senior Vice President,
General Counsel and
Secretary
By: Thomas P. O'Neill, Jr.
-------------------------
Senior Vice President
and Chief Financial
Officer
Orlando, Florida
May 7, 1997
<PAGE>
EXHIBIT 11
TUPPERWARE CORPORATION
STATEMENT OF COMPUTATION OF PER SHARE EARNINGS<F1>
(Unaudited)
[CAPTION]
13 Weeks Ended
--------------------------
March 29, March 30,
1997 1996
------------ -------------
(Dollars in millions, shares in thousands)
Earnings (1996 pro forma)................... $ 24.9 $ 29.0
======= =======
PRIMARY METHOD
Shares (1996 pro forma)
Cumulative average outstanding shares.. 62,087 62,030
Common equivalent shares............... 909 1,065
------- -------
Weighted average number of common
and common equivalent shares
outstanding......................... 62,996 63,095
======= =======
Primary earnings (1996 pro forma)
per share................................ $ 0.40 $ 0.46
FULLY DILUTED METHOD
Shares (1996 pro forma)
Cumulative average outstanding shares.. 62,087 62,030
Common equivalent shares............... 912 1,065
------- -------
Weighted average number of common
and common equivalent shares........
outstanding......................... 62,999 63,095
======= =======
Fully Diluted earnings (1996 pro forma)
per share................................ $ 0.40 $ 0.46
======= =======
<F1>For the 13 weeks ended March 30, 1996, the number of shares
actually outstanding and the number of common equivalent
shares existing at the date of the Distribution have been used.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
TUPPERWARE CORPORATION'S FIRST QUARTER 1997 FINANCIAL STATEMENTS AS
FILED IN ITS QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-27-1997
<PERIOD-START> DEC-29-1996
<PERIOD-END> MAR-29-1997
<CASH> 43,500
<SECURITIES> 0
<RECEIVABLES> 147,600
<ALLOWANCES> 25,600
<INVENTORY> 245,300
<CURRENT-ASSETS> 507,400
<PP&E> 949,000
<DEPRECIATION> 635,700
<TOTAL-ASSETS> 945,400
<CURRENT-LIABILITIES> 330,700
<BONDS> 256,900
0
0
<COMMON> 600
<OTHER-SE> 268,700
<TOTAL-LIABILITY-AND-EQUITY> 945,400
<SALES> 315,300
<TOTAL-REVENUES> 315,300
<CGS> 114,000
<TOTAL-COSTS> 114,000
<OTHER-EXPENSES> 2,800
<LOSS-PROVISION> 1,275
<INTEREST-EXPENSE> 4,700
<INCOME-PRETAX> 34,100
<INCOME-TAX> 9,200
<INCOME-CONTINUING> 24,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,900
<EPS-PRIMARY> 0.40
<EPS-DILUTED> 0
</TABLE>
