Tupperware Brands Corporation, Board Meeting, Jan 28, 2015
Jan 28 15
Tupperware Brands Corporation, Board Meeting, Jan 28, 2015. Agenda: To declare a dividend of $0.68 per share.
Tupperware Brands Corporation Announces Unaudited Consolidated Earnings Results for the Fourth Quarter and Full Year Ended December 27, 2014; Provides Unaudited Earnings Guidance for the First Quarter Ending March 28, 2015 and Full Year Ending December 26, 2015; Declares Regular Quarterly Dividend, Payable on April 3, 2015
Jan 28 15
Tupperware Brands Corporation announced unaudited consolidated earnings results for the fourth quarter and full year ended December 27, 2014. For the quarter, the company reported net sales were $679.9 million against $717.1 million a year ago. Operating income was $118.8 million against $126.6 million a year ago. Income before income taxes was $109.5 million against $116.1 million a year ago. Net income was $82.3 million against $89.7 million a year ago. Diluted earnings per share were $1.63 against $1.74 a year ago. EPS without items was at $1.72. The company ended up with a 25% drop due to pretax profit without items on higher sales whereas the high end of outlook included a negative 4% drop-through. The significant improvement was mainly in Europe and South America. The company ended up generating $220 million of cash flow from operating activities net of investing activities. This was the low end of October guidance range and with GAAP net income being up $6 million over the high end of range and notwithstanding the incremental hit from FX versus October guidance. The impact of weaker foreign exchange rate hurts more on cash flow even beyond earnings because the company generates a significant share of cash flow in the fourth quarter of each year. Last year, on this measure of cash flow, the company generated $263 million.
For the full year, the company reported net sales were $2,606.1 million against $2,671.6 million a year ago. Operating income was $367.7 million against $403.5 million a year ago. Income before income taxes was $298.2 million against $360.4 million a year ago. Net income was $214.4 million against $274.2 million a year ago. Diluted earnings per share were $4.20 against $5.17 a year ago. Net cash provided by operating activities was $282.1 million against $323.5 million a year ago. Capital expenditure was $69.4 million against $69 million a year ago. Total adjusted EBITDA of $428.4 million.
For the first quarter ending March 28, 2015, on unaudited basis, the company expects income before income taxes in a range of $59.7 million to $62.8 million, income tax in a range of $15 million to $5.8 million, net income in a range of $44.7 million to $47 million, effective rate of 25%, adjusted net income in a range of $49.4 million against $51.7 million, diluted net income per common share in a range of $0.89 to $0.94, adjusted diluted net income per common share in a range of $0.98 to $1.03. The local currency sales increased range remains at the plus 4% to 6% as indicated in October. This includes a range of plus 2% to 4% in the first quarter, which is most difficult comparison for the year as it was up 7% in local currency in the first quarter of 2013.
For the full year ending December 26, 2015, on unaudited basis, the company expects income before income taxes in a range of $307.1 million to $313.7 million, income tax in a range of $77.6 million to $79.3 million, net income in a range of $229.5 million to $234.4 million, effective rate of 25%, adjusted net income in a range of $245.3 million against $250.2 million, diluted net income per common share in a range of $4.20 to $4.68, adjusted diluted net income per common share in a range of $5.38 to $5.00. Outlook for cash flow in 2015 is to be in the range of $190 million to $200 million. At the high end of the range, again, putting aside the noncash hit in 2014 from the Venezuela step currency devaluations, net income is about $20 million lower in 2015 than 2014 and that includes a $43 million hit on the comparison from translation foreign exchange. This outlook includes $75 million of capital spending, which compares with $69 million in 2014. For the full year, looking at the segments in local currency, the company foresees sales to be about even with 2014 in Europe and Tupperware North America, up mid- to high single digit in Asia, down slightly in Beauty North America and up 20% plus in South America. These outlooks reflect tempered expectations for the U.S.-based business units in light of work being done to transform these units. In the case of BeautiControl, this part is meant to lead to a significant improvement in value chain as highlighted by Rick. Outlook range for earnings per share without items is $4.90 to $5. At the high end, this would be up 10% in local currency, but after an $0.83 translation FX hit on the comparison with 2014, is down 7% in dollars. Also, net interest expense is forecast at about $46 million, up $2.5 million from 2014, reflecting a higher level of cash flow hedges for the full year and higher forward points on those hedges in light of interest rate increases in countries of many of the currencies being hedged.
The company declared the regular quarterly dividend. The dividend declared was 68 cents per share, even with the previous quarter. It is payable on April 3, 2015 to shareholders of record as of March 18, 2015. The dividend is in line with the company's targeted payout ratio of approximately 50% of trailing full year diluted earnings per share without items.