Tupperware Brands Corporation announced its business continuity plans in response to the COVID-19 pandemic, which are aimed to preserve the long-term financial health of the business.
“During these uncertain times, the health and safety of our employees and sales force remains our top priority,” said Miguel Fernandez, president and CEO of Tupperware Brands. “Like many companies navigating this unprecedented environment, we must take prudent and disciplined steps to reduce expenses and maintain necessary financial flexibility and liquidity. Decisions that adversely impact our employees are never easy, and we are deeply appreciative of all of our employees for their commitment to our purpose and our independent sales force. We are confident that our current actions will better position the Company to advance our turnaround, strengthen our financial position and accelerate our growth strategies once we emerge from this challenging time.”
In response to the economic and business disruption caused by COVID-19, the company has implemented the following measures:
- Elimination of all non-essential operating expenses and capital expenditures, including the continuation of a discretionary spending and travel freeze;
- Suspension of corporate and unit merit increases globally;
- A salary reduction of 20% for the company’s CEO and executive vice chairman for the second quarter; additionally, 20% reduction in cash retainers for the second quarter and waivers of certain other fees for the board of directors; and,
- Temporary furloughs, leave without pay or reduction in wages across corporate, factory and market-level associates globally.
In addition to the measures outlined, the company is advancing its organization realignment and cost reduction programs, including changes to organizational design and supply chain, which the company estimates will deliver $50 million savings this year.
Maintaining Financial Position
To ensure liquidity during this period of worldwide uncertainty, the company took the proactive measure and drew down $225 million under its credit agreement on March 30, 2020, as previously announced. An amount of $175 million was drawn and the remaining amount of $50 million was drawn for customary working capital needs during the second quarter of 2020. The company expects to pay-down the draw prior to the end of the second quarter.
Tupperware Brands ended the 2019 fiscal year with $123 million of cash. Together with the liquidity available under its existing line of credit, and recent actions around operating expenses, working capital, real estate sales and capital expenditures, the company believes it will be able to fund near-term operations while working diligently towards long-term objectives and value creation.
Rich Goudis, executive vice chairman of Tupperware Brands added, “We are taking these actions to ensure we can deliver value to all stakeholders now and over the long-term. The draw down from our credit agreement was a cautionary step to ensure we have financial flexibility and liquidity during this time, and as we advance efforts to refinance our bonds due in June 2021.”