Tupperware Brands Corp. (TUP, Financial) filed Quarterly Report for the period ended 2009-09-26.
Tupperware Brands Corporation is a global direct seller of premium innovative products across multiple brands and categories through an independent sales force. 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 its Avroy Shlain BeautiControl Fuller NaturCare Nutrimetics Nuvo and Swissgarde brands. Tupperware Brands Corp. has a market cap of $2.84 billion; its shares were traded at around $45.05 with a P/E ratio of 16.4 and P/S ratio of 1.3. The dividend yield of Tupperware Brands Corp. stocks is 1.9%. Tupperware Brands Corp. had an annual average earning growth of 1.2% over the past 10 years.
The Company recorded $2.4 million and $6.5 million in re-engineering and impairment charges during the third quarter and year-to-date period of 2009, respectively, primarily related to severance costs incurred in the Companys Argentina, Australia, BeautiControl and Mexico operations, mainly due to implementing changes in the businesses management structures. Also included was $2.0 million related to the impairment of software and property, plant and equipment.
The Company recorded $1.2 million and $6.9 million in re-engineering charges during the third quarter and year-to-date period of 2008, respectively, primarily related to severance costs incurred to reduce headcount in the Companys BeautiControl, France, Germany, Netherlands, Italy, Malaysia, Mexico and Philippines operations. The bulk of the remaining cost was an impairment charge related to software the Company no longer expected to utilize. Additionally, the Company recorded $1.8 million to write off inventory in South America as a result of a decision to sell beauty products in Brazil through the Tupperware sales force and streamline the product line offered. The write off of inventory was included in the cost of products sold line item in the Consolidated Statements of Income.
In prior years, the Company recorded impairments related to its Nutrimetics and NaturCare businesses, in part due to the fact that current and forecasted future results of operations were below its prior projections. This resulted from benefits related to strategies implemented since the acquisition of these businesses in 2005 not occurring as quickly or significantly as had been projected. Also contributing to the previous impairments was an overall increase to the assumed discount rates used in the valuations. Although some improvements have been made in these businesses, the rates of growth of sales, profit and cash flow of the Nutrimetics and NaturCare businesses in the second quarter of 2009 were below the Companys projections used in its previous valuations, as was the forecast for growth in future periods. In the second quarter of 2009, the Company also noted that financial results of the South African beauty business were not meeting the projections used in the 2008 valuation. Given the sensitivity of the valuations to changes in cash flows for these reporting units, the Company performed interim impairment tests of tradenames and reporting units, reflecting reduced future forecasts in these markets, including the impact of the external environment. The result of the interim impairment tests was to record tradename impairments of $10.1 million for Nutrimetics, $4.2 million for NaturCare and $2.0 million for Avroy Shlain in the second quarter of 2009. In addition to the impairment of tradenames, the Company also recognized impairments of goodwill of $8.6 million and $3.2 million relating to the Nutrimetics and South African beauty reporting units, respectively. In the third quarter of 2009, the Company completed annual impairment tests for all of the reporting units, other than BeautiControl which was completed in the second quarter, noting no further impairment. Refer to Note 8 to the Consolidated Financial Statements for further discussion of goodwill and tradename valuations and impairments.
Also contributing to this decrease was less amortization expense related to definite-lived intangible assets acquired with the direct selling businesses of Sara Lee Corporation in December 2005. These intangible assets are primarily the value of independent sales forces. The amortization is recorded to reflect the estimated turnover rates of the sales forces and was $1.3 million in the third quarter of 2009 as compared with $2.4 million in the same period of 2008. For the full year of 2009, the amortization is expected to be $5.1 million versus $9.0 million in 2008.
Net interest expense was $7.6 million for the third quarter of 2009 compared with $9.0 million for the same period of 2008. For the year-date-period of 2009 net interest expense was $21.2 million compared with $25.3 million for the same period of 2008. The decreases were mainly related to a lower average debt level and lower U.S. interest rates in 2009 compared with 2008.
Read the The complete ReportTUP is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., John Hussman of Hussman Economtrics Advisors, Inc..
Tupperware Brands Corporation is a global direct seller of premium innovative products across multiple brands and categories through an independent sales force. 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 its Avroy Shlain BeautiControl Fuller NaturCare Nutrimetics Nuvo and Swissgarde brands. Tupperware Brands Corp. has a market cap of $2.84 billion; its shares were traded at around $45.05 with a P/E ratio of 16.4 and P/S ratio of 1.3. The dividend yield of Tupperware Brands Corp. stocks is 1.9%. Tupperware Brands Corp. had an annual average earning growth of 1.2% over the past 10 years.
Highlight of Business Operations:
Net cash flow from operating activities was $128.6 million in the year-to-date period of 2009 compared with $7.3 million in 2008. The increase primarily reflected higher net income after considering the inclusion in 2009 of the higher amount of non-cash impairment charges, a $58.1 million lower increase in inventory versus the prior year end, and a $16.9 million cash inflow from the settlement of foreign currency hedge contracts in 2009 compared to a $24.8 million outflow in 2008.The Company recorded $2.4 million and $6.5 million in re-engineering and impairment charges during the third quarter and year-to-date period of 2009, respectively, primarily related to severance costs incurred in the Companys Argentina, Australia, BeautiControl and Mexico operations, mainly due to implementing changes in the businesses management structures. Also included was $2.0 million related to the impairment of software and property, plant and equipment.
The Company recorded $1.2 million and $6.9 million in re-engineering charges during the third quarter and year-to-date period of 2008, respectively, primarily related to severance costs incurred to reduce headcount in the Companys BeautiControl, France, Germany, Netherlands, Italy, Malaysia, Mexico and Philippines operations. The bulk of the remaining cost was an impairment charge related to software the Company no longer expected to utilize. Additionally, the Company recorded $1.8 million to write off inventory in South America as a result of a decision to sell beauty products in Brazil through the Tupperware sales force and streamline the product line offered. The write off of inventory was included in the cost of products sold line item in the Consolidated Statements of Income.
In prior years, the Company recorded impairments related to its Nutrimetics and NaturCare businesses, in part due to the fact that current and forecasted future results of operations were below its prior projections. This resulted from benefits related to strategies implemented since the acquisition of these businesses in 2005 not occurring as quickly or significantly as had been projected. Also contributing to the previous impairments was an overall increase to the assumed discount rates used in the valuations. Although some improvements have been made in these businesses, the rates of growth of sales, profit and cash flow of the Nutrimetics and NaturCare businesses in the second quarter of 2009 were below the Companys projections used in its previous valuations, as was the forecast for growth in future periods. In the second quarter of 2009, the Company also noted that financial results of the South African beauty business were not meeting the projections used in the 2008 valuation. Given the sensitivity of the valuations to changes in cash flows for these reporting units, the Company performed interim impairment tests of tradenames and reporting units, reflecting reduced future forecasts in these markets, including the impact of the external environment. The result of the interim impairment tests was to record tradename impairments of $10.1 million for Nutrimetics, $4.2 million for NaturCare and $2.0 million for Avroy Shlain in the second quarter of 2009. In addition to the impairment of tradenames, the Company also recognized impairments of goodwill of $8.6 million and $3.2 million relating to the Nutrimetics and South African beauty reporting units, respectively. In the third quarter of 2009, the Company completed annual impairment tests for all of the reporting units, other than BeautiControl which was completed in the second quarter, noting no further impairment. Refer to Note 8 to the Consolidated Financial Statements for further discussion of goodwill and tradename valuations and impairments.
Also contributing to this decrease was less amortization expense related to definite-lived intangible assets acquired with the direct selling businesses of Sara Lee Corporation in December 2005. These intangible assets are primarily the value of independent sales forces. The amortization is recorded to reflect the estimated turnover rates of the sales forces and was $1.3 million in the third quarter of 2009 as compared with $2.4 million in the same period of 2008. For the full year of 2009, the amortization is expected to be $5.1 million versus $9.0 million in 2008.
Net interest expense was $7.6 million for the third quarter of 2009 compared with $9.0 million for the same period of 2008. For the year-date-period of 2009 net interest expense was $21.2 million compared with $25.3 million for the same period of 2008. The decreases were mainly related to a lower average debt level and lower U.S. interest rates in 2009 compared with 2008.
Read the The complete ReportTUP is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., John Hussman of Hussman Economtrics Advisors, Inc..
