Tupperware Brands Corporation announced it has engaged financial advisors to help improve its capital structure and near-term liquidity while noting in a statement it has “substantial doubt” about its ability to continue as a going concern.
The company said it is reviewing its real estate portfolio for property available for potential dispositions or sale-leaseback transactions. Tupperware added it is exploring “right-sizing” efforts, monetization of fixed assets, cash management, and marketing and channel optimization to preserve or deliver additional liquidity.
“Tupperware has embarked on a journey to turn around our operations and today marks a critical step in addressing our capital and liquidity position,” said Miguel Fernandez, president and CEO of Tupperware Brands. “The company is doing everything in its power to mitigate the impacts of recent events, and we are taking immediate action to seek additional financing and address our financial position.”
Tupperware, in a statement, reported it has determined that a violation of its credit facility covenants is probable to occur as a result of the company’s delay in filing its annual report on Form 10-K for the year ended December 31, 2022, as well as cash constraints caused by higher interest costs and timing of re-engineering actions.
Tupperware management forecasts that if it is unable to obtain adequate capital resources or amendments to its credit agreement, it may not have adequate liquidity in the near term. As a result, the company has concluded there is substantial doubt about its ability to continue as a going concern.
This going concern status requires Tupperware to write down certain non-cash deferred tax assets and goodwill and other intangible assets. Therefore, the financial results reflected in its Form 10-K, when filed, will differ significantly in these areas from the preliminary results Tupperware announced on March 1, 2023.
On April 3, 2023, Tupperware received a notice from the New York Stock Exchange (NYSE) indicating the company is not in compliance with Section 802.01E of the NYSE Listed Company Manual as a result of its failure to timely file Form 10-K. The NYSE informed Tupperware that, under NYSE rules, the company has six months from the Form 10-K due date to regain compliance with the NYSE listing standards by filing Form 10-K with the Securities and Exchange Commission (SEC). If Tupperware fails to file Form 10-K within the six-month period, the NYSE may grant, at its sole discretion, an extension of up to six additional months for the company to regain compliance, depending on the specific circumstances. The NYSE notice indicated it nevertheless may commence delisting proceedings at any time if it deems that circumstances warrant.
Tupperware reported it currently expects to file its Form 10-K with the SEC within the next 30 days, adding there can be no assurance that the Form 10-K will be filed at such time.
