Attached files
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| 8-K - TUPPERWARE BRANDS CORP | v171179_8k.htm |
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World
Headquarters
14901
S. Orange Blossom Trail
Orlando,
FL 32837
Mailing
Address:
Post
Office Box 2353
Orlando,
FL 32802-2353
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CONTACT: Nicole
Decker (407) 826-4560
Tupperware
Brands Comments on Venezuela
ORLANDO, Fla., January 12, 2010
— Tupperware Brands Corporation (NYSE: TUP) - On Friday, January 8, 2010,
the Venezuelan government announced its intention to devalue its currency
(bolivar) and move to a two tier exchange structure. Although no official rules
have yet been issued, the official exchange rate is expected to move from 2.15
to 2.60 for essential goods and 4.30 for non-essential goods and services.
Tupperware's products are expected to fall into the non-essential
classification. This change will not have any impact on the 2009 results of the
Company.
Effective
with the beginning of its 2010 fiscal year, Tupperware will account for
Venezuela as hyperinflationary and will use the exchange rate at which it
expects to be able to remit dividends to translate its earnings and month end
balance sheets. This is currently the “parallel” exchange rate that has last
been quoted at 6.48 bolivars to the U.S. dollar. This rate is 67 percent worse
than the 2.15 official exchange rate used by the Company to translate its 2009
earnings. In 2009, the Company recorded $8.4 million of pretax costs to convert,
at the available parallel exchange rate, bolivars generated by its Venezuelan
business. This cost will not recur in 2010, but conversion of the unit’s
earnings at the current parallel exchange rate would have an offsetting negative
pretax translation impact on the comparison with 2009 of approximately $8
million. As these factors are roughly offsetting, they do not negatively impact
the 2010 earnings guidance range provided by the Company in October 2009, which
included a cost to convert bolivars at the parallel exchange rate.
As of the
end of 2009, the Company had approximately $5 million of net monetary assets in
Venezuela, which are of a nature that will generate income or expense for the
change in value associated with exchange rate fluctuations versus the U.S.
dollar.
In 2009,
the Company had $60.1 million of sales in Venezuela, stated at the 2.15 bolivars
to U.S. dollars official exchange rate that existed throughout the year, and
produced pretax profit in Venezuela of $12.4 million at that rate, before the
$8.4 million cost of converting bolivars to U.S. dollars described
above.
Chairman
and CEO, Rick Goings, commented, “We have a terrific business in Venezuela with
a great management team and sales force in place. Due to the external
environment we operate in, we’ve also been carefully managing our value chain
given the reality of what it costs to pay for things from outside the country,
and this has allowed us to achieve a good return on sales in Venezuela. At the
same time, we’ve proactively looked in 2009 to make our cash available even when
we’ve needed to do that at the parallel exchange rate, which has also allowed us
to anticipate the current situation and avoid disruption in our earnings
comparisons.”
(more)
The
Company will report its fourth quarter and full year 2009 results on February 1,
2010 and will conduct an analyst call on February 2, 2010.
Tupperware Brands Corporation
is a portfolio of global direct selling companies, selling innovative, premium
products across multiple brands and categories through an independent sales
force of 2.4 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 for consumers through the
Armand Dupree, Avroy Shlain, BeautiControl, Fuller Cosmetics, NaturCare,
Nutrimetics, Nuvo and Swissgarde 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", “expects” or "target" are forward-looking statements.
These statements involve risks and uncertainties which include recruiting and
activity of the Company's independent sales forces, the success of new product
introductions and promotional programs, governmental approvals for use in food
containers of materials such as polycarbonate, 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
most recent periodic report as filed in accordance with the Securities Exchange
Act of 1934. The Company does not intend to update forward-looking information
other than through its quarterly earnings releases unless it expects diluted
earnings per share for the current quarter, excluding adjustment items, to be
significantly below its previous guidance.
###