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 June 26, 2004
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 incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 14901 South Orange Blossom Trail, Orlando, Florida | 32837 | |
| (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 ¨.
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨.
As of August 2, 2004, 58,552,278 shares of the Common Stock, $0.01 par value, of the Registrant were outstanding.
| Page Number | ||||
| PART I. FINANCIAL INFORMATION | ||||
| Item 1. |
Financial Statements |
|||
| Consolidated Statements of Income (Unaudited) for the 13 weeks ended June 26, 2004 and June 28, 2003 |
2 | |||
| Consolidated Statements of Income (Unaudited) for the 26 weeks ended June 26, 2004 and June 28, 2003 |
3 | |||
| Consolidated Balance Sheets (Unaudited) as of June 26, 2004 and December 27, 2003 |
4 | |||
| 6 | ||||
| 7 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
16 | ||
| Item 4. |
32 | |||
| PART II. OTHER INFORMATION | ||||
| Item 2. |
Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
34 | ||
| Item 4. |
34 | |||
| Item 6. |
35 | |||
| 36 | ||||
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. Although certain information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America 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 are 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 27, 2003.
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.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| 13 Weeks Ended | ||||||
| June 26, 2004 |
June 28, 2003 | |||||
| (In millions, except per share amounts) | ||||||
| Net sales |
$ | 302.1 | $ | 310.0 | ||
| Cost of products sold |
99.7 | 108.6 | ||||
| Gross margin |
202.4 | 201.4 | ||||
| Delivery, sales and administrative expense |
169.1 | 179.4 | ||||
| Re-engineering and impairment charges |
0.7 | — | ||||
| Gains on disposal of assets |
0.1 | 1.2 | ||||
| Operating income |
32.7 | 23.2 | ||||
| Interest income |
0.5 | 0.4 | ||||
| Other income |
0.3 | 0.6 | ||||
| Interest expense |
3.7 | 2.5 | ||||
| Other expense |
1.0 | 3.5 | ||||
| Income before income taxes |
28.8 | 18.2 | ||||
| Provision for income taxes |
5.1 | 4.1 | ||||
| Net income |
$ | 23.7 | $ | 14.1 | ||
| Net income per common share: |
||||||
| Basic |
$ | 0.40 | $ | 0.24 | ||
| Diluted |
$ | 0.40 | $ | 0.24 | ||
| Dividends per common share |
$ | 0.22 | $ | 0.22 | ||
See accompanying Notes to Consolidated Financial Statements (Unaudited).
2
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| 26 Weeks Ended | ||||||
| June 26, 2004 |
June 28, 2003 | |||||
| (In millions, except per share amounts) | ||||||
| Net sales |
$ | 598.5 | $ | 581.5 | ||
| Cost of products sold |
199.8 | 197.9 | ||||
| Gross margin |
398.7 | 383.6 | ||||
| Delivery, sales and administrative expense |
345.9 | 344.2 | ||||
| Re-engineering and impairment charges |
0.7 | — | ||||
| Gains on disposal of assets |
1.5 | 1.2 | ||||
| Operating income |
53.6 | 40.6 | ||||
| Interest income |
1.0 | 1.0 | ||||
| Other income |
0.6 | 0.6 | ||||
| Interest expense |
6.9 | 7.5 | ||||
| Other expense |
1.0 | 8.3 | ||||
| Income before income taxes |
47.3 | 26.4 | ||||
| Provision for income taxes |
9.1 | 5.9 | ||||
| Net income |
$ | 38.2 | $ | 20.5 | ||
| Net income per common share: |
||||||
| Basic |
$ | 0.65 | $ | 0.35 | ||
| Diluted |
$ | 0.65 | $ | 0.35 | ||
| Dividends per common share |
$ | 0.44 | $ | 0.44 | ||
See accompanying Notes to Consolidated Financial Statements (Unaudited).
3
CONSOLIDATED BALANCE SHEETS
ASSETS
(Unaudited)
| June 26, 2004 |
December 27, 2003 |
|||||||
| (In millions) | ||||||||
| Cash and cash equivalents |
$ | 23.5 | $ | 45.0 | ||||
| Accounts receivable |
115.5 | 127.3 | ||||||
| Less allowances for doubtful accounts |
(22.8 | ) | (25.2 | ) | ||||
| 92.7 | 102.1 | |||||||
| Inventories |
169.6 | 160.5 | ||||||
| Deferred income tax benefits, net |
59.1 | 59.2 | ||||||
| Non-trade amounts receivable |
37.5 | 28.6 | ||||||
| Prepaid expenses |
19.1 | 16.0 | ||||||
| Total current assets |
401.5 | 411.4 | ||||||
| Deferred income tax benefits, net |
146.8 | 136.8 | ||||||
| Property, plant and equipment |
1,053.1 | 1,059.3 | ||||||
| Less accumulated depreciation |
(842.2 | ) | (837.9 | ) | ||||
| 210.9 | 221.4 | |||||||
| Long-term receivables, net of allowances of $28.3 million at June 26, 2004 and $26.8 million at December 27, 2003 |
42.8 | 45.4 | ||||||
| Goodwill, net of accumulated amortization of $1.6 million at June 26, 2004 and December 27, 2003 |
56.2 | 56.2 | ||||||
| Other assets, net |
20.9 | 18.7 | ||||||
| Total assets |
$ | 879.1 | $ | 889.9 | ||||
See accompanying Notes to Consolidated Financial Statements (Unaudited).
4
TUPPERWARE CORPORATION
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS’ EQUITY
(Unaudited)
| June 26, 2004 |
December 27, 2003 |
|||||||
| (Dollars in millions except per share amounts) |
||||||||
| Accounts payable |
$ | 64.8 | $ | 86.0 | ||||
| Short-term borrowings and current portion of long-term debt |
3.5 | 5.6 | ||||||
| Accrued liabilities |
193.0 | 182.6 | ||||||
| Total current liabilities |
261.3 | 274.2 | ||||||
| Long-term debt |
257.2 | 263.5 | ||||||
| Accrued postretirement benefit cost |
37.3 | 36.4 | ||||||
| Other liabilities |
91.1 | 87.6 | ||||||
| Commitments and contingencies |
||||||||
| 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 | ||||||
| Paid-in capital |
24.6 | 23.1 | ||||||
| Subscriptions receivable |
(18.6 | ) | (20.6 | ) | ||||
| Retained earnings |
540.6 | 529.0 | ||||||
| Treasury stock, 3,815,011 shares at June 26, 2004, and 3,850,343 shares at December 27, 2003, at cost |
(104.2 | ) | (105.5 | ) | ||||
| Unearned portion of restricted stock issued for future service |
(1.3 | ) | (1.6 | ) | ||||
| Accumulated other comprehensive loss |
(209.5 | ) | (196.8 | ) | ||||
| Total shareholders’ equity |
232.2 | 228.2 | ||||||
| Total liabilities and shareholders’ equity |
$ | 879.1 | $ | 889.9 | ||||
See accompanying Notes to Consolidated Financial Statements (Unaudited).
5
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 26 Weeks Ended |
||||||||
| June 26, 2004 |
June 28, 2003 |
|||||||
| (In millions) | ||||||||
| Operating Activities: |
||||||||
| Net income |
$ | 38.2 | $ | 20.5 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
25.0 | 26.4 | ||||||
| Net gain on sale of assets |
(1.0 | ) | (0.6 | ) | ||||
| Non-cash impact of re-engineering and impairment charges |
0.3 | — | ||||||
| Changes in assets and liabilities: |
||||||||
| Decrease in accounts receivable |
10.4 | 5.0 | ||||||
| Increase in inventories |
(9.8 | ) | (0.5 | ) | ||||
| (Decrease) increase in accounts payable and accrued liabilities |
(12.8 | ) | 2.2 | |||||
| Decrease in income taxes payable |
(2.8 | ) | (10.3 | ) | ||||
| Increase in net deferred income taxes |
(11.6 | ) | (5.0 | ) | ||||
| Net cash impact from fair value hedge activity |
(8.0 | ) | 11.6 | |||||
| Other, net |
(6.6 | ) | (7.5 | ) | ||||
| Net cash provided by operating activities |
21.3 | 41.8 | ||||||
| Investing Activities: |
||||||||
| Capital expenditures |
(20.2 | ) | (17.4 | ) | ||||
| Proceeds from disposal of property, plant and equipment |
2.8 | 3.0 | ||||||
| Net cash used in investing activities |
(17.4 | ) | (14.4 | ) | ||||
| Financing Activities: |
||||||||
| Dividend payments to shareholders |
(25.8 | ) | (25.7 | ) | ||||
| Proceeds from exercise of stock options |
1.0 | 0.9 | ||||||
| Payments received on subscriptions receivable |
1.5 | — | ||||||
| Net (decrease) increase in short-term debt |
(1.5 | ) | 1.2 | |||||
| Payment of long-term debt |
— | (15.0 | ) | |||||
| Net cash used in financing activities |
(24.8 | ) | (38.6 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents |
(0.6 | ) | 0.5 | |||||
| Net decrease in cash and cash equivalents |
(21.5 | ) | (10.7 | ) | ||||
| Cash and cash equivalents at beginning of year |
45.0 | 32.6 | ||||||
| Cash and cash equivalents at end of period |
$ | 23.5 | $ | 21.9 | ||||
See accompanying Notes to Consolidated Financial Statements (Unaudited).
6
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 notes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. 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, results of operations and cash flows. The results of operations of any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.
Certain prior year amounts have been reclassified on the consolidated financial statements to conform to current year classifications.