Tupperware Brands Corp (TUP) 2003 Q3 法說會逐字稿

Good day, everyone. Welcome to the Tupperware third quarter 2003 earnings result conference call. The call is being recorded. I would like to turn the call over to the chairman and CEO Mr. Rick Goings. Please go ahead, sir.

Thank you, and thank you all of you for joining us this morning. I'm joined this morning about Pradeep Mathur, our CFO, and Jane Garrard, head of IR. Some of the discussions will include the outlook of our Biggs so I refer you to the company's position on forward-looking statements. I will quickly summarize the quarter and then will drill down on some of the specifics of each segments. The results were a little better than what we indicated last month in the pre-release because of the continuing momentum in our European operations. All other areas performed as expected and as discussed last month. Let me get into Europe a bit more. As we indicated earlier this year, the positive momentum was expected to continue throughout the year, and that's been the case. The quarter's results were primary led by Germany along with growing contribution from Russia and we've see very nice development in the Nordics, Ben lux, et cetera.

The issue -- the increase is due to sales increases due to the larger sales force, and at the same time it's due to better capacity utilization, and at the same time our promotional spending has been more effective and we've had continued increased efficiencies. The sales force size is the big key in Europe. We have a strong advantage, 8%, same as last quarter. The average active sales force was up to 7% versus 2% in the second quarter. So that's very positive and speaks to momentum in the future. These increases should favorably influence what happens in the Europe, but however, we are seen going to lap this double-digit growth and comparisons are expected to moderate as they comparisons are more difficult. Looking at integrated direct Access in Europe, we continue to expand this initiative mindfully, ending the quarter with double the number of showcases we had last year. The sales contribution is still small, but growing nicely, leading us to not only new recruits, but the ability to schedule parties. And this drives the core business. Let me turn to the North American business. Clearly the target experience has had an extensive and negative ramifications on the sales force size.

Our party scheduling and the related sales trends. It is important to remember to put into context that while we announced the end of the Target partnership four months ago in mid-June, products were still on their shelves until mid September. We had to back our partner there in an orderly exit from Target. We have in the time since been focused in recruiting programs to get our sales force size back on the grow again. This does require some promotional investment, but it is first necessary to rebuild the size of the sales force to get the other kind of momentum indicators moving in the right direction. This is similar, by the way, what we're doing in the U.S. to what we did in Europe and focused on two years ago and we've been doing it for the last two years in Europe, which you've seen pay off in the growth of the size of the sales force advantage and we've been able to reduce our promotional spending at the same time. We are seeing early signs of improvement in recruiting trends in the U.S. We reported that last month. It continues. In September and October, recruiting was up significantly over last year. However, we want to keep this in context. We believe it's going to take until mid 2004 before our sales force size reaches a level where we start to see some positive comparisons.

So the pressure will continue for the next three quarters. Additionally, we continue to roll out our interactive party experience, not only in the U.S. but in a couple other markets as well. The new party experience, by the way, it increases the opportunity for recruiting and scheduling future parties, because it's a fun and educational and actually entertaining experience. And it makes it easy for us to book another party from existing parties. We're also continuing to see higher average sales at these parties, and so the momentum there looks good as well. That's the key interface between Tupperware and the consumer. So it is very important. We learned from BeautiControl, though, that it's going to take some time before we get a large percentage of our sales force using utilizing this new format. Even after a year BeautiControl with the new spa format, only 25% of their sales force uses that new format. So it will take time to build the percentage, but we're getting good results from those who are. We're also launching this interactive party experience in several markets around the world and we're seeing the same positive kinds of results. In France, they call the new [inaudible], they sauce it SAVOIR far (ph) there, and it's heightening our booking level at current parties.

This is very important for us globally as well as in the U.S. By the way, turning back to the U.S., the U.S. direct-selling industry just came out with its statistics on performance of businesses. What we're seeing is the party plan selling is growing the fastest, and in the durable sector it's doing the best. So more and more businesses are moving to a new entertaining kind of a format. Let me spend a little time in integrated direct access in the U.S. particularly after a difficult target experience. IDA continues to be an important initiative in North America. It grew during the quarter over last year, and while most of the incremental growth was from the Internet and television shopping we were pleased to see that our showcase business is showing some strong signs of growing after this Target experiencing and rebounding to former levels. Our fourth quarter showcase program is ramping up nicely, and we're going to meet or exceed the number of showcases we had in the United States last year. Additionally, and this is important for us, the showcase productivity continues to improve as a result of not only new merchandising efforts, including demonstrations to attract consumers to the showcase, but also what's impacting the productivity is increased concentration of our better sales consultants and sales managers on showcases and not target business.

Showcases are a primary focus for us, because it allows the sales force to interact with consumers, and it provides the opportunity to schedule parties and recruit new sales force members. We're also able to sell the Tate of Tupperware concept at Showcases and that helps the core business as well. Moving to other integrated direct access initiatives QVC, as you know, we shifted to them midyear, because they were simply three times the size of [inaudible]. We've had strong results. As a matter of fact, the sales levels have tripled that of HSN (ph) if you saw the one-hour show just several weeks ago, we're able to preview the Taste of Tupperware theme on QVC, and it gives us the opportunity to also explain other products that are available at this new Taste of Tupperware party. The Internet continues to have also strong year-over-year growth this last quarter and we were also pleased to see the majority of sales on the Internet in the third quarter were not from Tupperware.com site, but from our sales force website, which really helps build their opportunity and their income, and that's our whole goal. Regarding cost reductions in our U.S. business, we discussed it in the September release. I'm going to have Pradeep get more into details on that, but they more deal with taking out cost and margin improvements and aligning the business to the actual current sales trends.

Let me go to Asia Pacific next. The area is operating as anticipated, and we'll continue to see we think improvements through the second half, and the second half should outperform the first half. I'm leaving tonight for Korea. I'll be there looking at our Korean business and Philippine business and we have all of our Asia Pacific Managing directors in Kuala Lumpur Malaysia, so we're digging deeper into how they're going to end the year as well as next year's plans. While sales were up slightly in the overall PAC rim, profits were down and that was mostly due to Korea and an unfavorable product mix change in Japan and resulting in low margins, and we're currently rebalancing the product mix particularly in Japan to recapture some of that margin. We'll get into that more later. Australia, Malaysia, Singapore, along with emerging markets of China, India and Indonesia, continue to have strong results. As a matter of fact, the emerging markets of Asia are starting to contribute around one-fifth of Asia Pacific sales year to date, and all of them are profitable. I might say, too, the potential in chin, India, and Indonesia continues to be very strong as they represent just under half the world's population. There's two current in these markets that help underline support our business potential. First, there are limited earning opportunities for women and the retail infrastructure there is fairly primitive, and one thing Pradeep always notes at our IR meetings is people in these geographies spend a higher percentage of their GDP per capita on things that relate to food, and so the simple thing of having a product line which preserves food is helpful to them, and makes it a more important product category.

Let me comment a bit more on two of these markets. We've said to you have been experiencing problems in the PAC rim, the Philippines and Korea. Korea continues to be a challenge with no change in the trends. We have resized our expense base there. Recruiting has been successful, but we're still having a difficult time converting these recruits to active sellers, thus far the training and the promotional efforts had really had minimal results. I'm going to be digging into that Thursday and Friday of this week along with other members of senior management who will be in Seoul with me. The Philippines, however, continues to show sequential improvement in both sales and profits, and the fourth quarter it's expected to turn the corner and return to positive comparisons. I'll know more face-to-face after I'm there this weekend. Moving to Latin America, through most of the year we have been on track in our recovery in all of our markets in Latin America. Sales trends have been improving. However, there was a blip in the third quarter, as you're probably aware. Heavy flooding during September impacted half of the sales geographies in our Mexican business, and as you know, Mexico is our largest Latin-American market. The unaffected sales territories in Mexico are performing as expected.

In spite of these sales challenge, profits are improving sequentially due to reductions in the Mexican sales expenses. I just returned from being with all of our Mexican distributors this past week, and I can tell you very high motivation levels and I think very effectively they're continuing down the road on the rollout of BeautiControl in Mexico. As a matter of fact they call the business there Tupperware BeautiControl and it's now moving up to 8% of our sales there. Again, the important transaction there of this transformation is Latin's spend over $20 billion on personal care products and less than $1 billion on the Tupperware category of products. We're really trying to knock other direct sellers off our shelf space and get our sales force not to show their beauty catalogs. Efforts to dramatically expand BeautiControl, they have included the revision of a monthly brochure to include more BeautiControl focus. I would encourage you to ask Jane to get a copy of the new BeautiControl Tupperware brochure, because it really does show specific new focus on the BeautiControl business. Additionally, we are moving towards sourcing more of our products to Mexico. Now we're over 70%. That means we can be more competitive in the marketplace with our pricing to consumers and increase the number of units. So we're making nice progress there. Most direct sellers, by the way, are having very challenging time in Mexico this year, not only as a result of what's happened over the last quarter with regard to flooding, but with the pressure on disposable income, so we're holding our own there.

Turning to BeautiControl in North America, this business continues to grow double digit, with sales up 23%, supported by sales force growth of 22%. Not unusual, the correlation here, and the average active, this is very important, up 27%. So we're getting more people into the business, they're converting to active, and more of them are active. Although profits were down in this quarter, this really is only due to a one-time benefit from prior year, not in the present year, excluding this, profits would have been improved more than a million versus the prior year, I think 1.3 million. Sales momentum has been strong, and it's expected to continue with increasing focus on -- of a growing ROS, which is expected to get better going forward. Let me turn it over to Pradeep and then we'll turn to your questions.

Thank you Rick. Let me first start with the balance sheet, move to the U.S. cost restructure. Take a minute to talk about the definition change in the business this [inaudible] for our Asia Pacific business and close with the outlook for the year. Regarding the balance sheet, as indicated in our last quarter's call, our business seasonality led to an increase in the debt to capital ratio, however we continue to be positive debt reductions and the improvements in the total debt to capital ratio in our year over year comparisons. The debt to total cap ratio in the third quarter was 62%, compared to 72% in the same period last year, and we are on track to achieve our year-end target of approximately 55%. Our receivables continue to improve with a decrease in day sales outstanding from 47 in the third quarter last year to 37 this year. Inventory did show an increase during this quarter, as we start lapping some nice improvements in the prior year, making it more difficult to continue this rate of improvement. Moreover, most of the year over year increase in stock level was related to currency translation, particularly the euro. As we have said before, we do anticipate a $5 to $10 million from working capital to contribute to cash flow this year. Let me now spend some time working through the details of our efforts to align costs with the current sales trends in the U.S.

It is our intention to focus on key business initiatives that will affect trends and eliminate distractions for both the management team and the sales force. As Rick indicated, our main areas of focus include recruiting new sales force members, expanding the Taste of Tupperware interactive party experience and expanding IDA, particularly showcases through the internet and QVC. This focus, along with the elimination of several initiatives leads us to make changes in two primary areas. The first is cost reductions. We believe we can achieve cost reductions of $10 million in the area of administrative expenses, primarily back-office support. We plan to achieve cost reductions in four main areas. First headcount reductions which have already been done and will lead to immediate cost savings. Approximately 80 headcount reductions were made in early October in manufacturing and administration in the U.S. Next, we've already identified areas to eliminate contractors, and this will be done by the end of this year. We've also been working over the past six months or so to bring our sales force websites in house, currently it is outsourced, and this will be implemented by April of 2004. Lastly, we will be outsourcing certain administrative services to cheaper locations. So all of these four measures are expected to reduce cost by approximately $10 million in 2004. The next major area is margin improvement.

In 2003, we had to aggressively discount stock in the U.S. as a result of not meeting sales expectations. This is not expected to recur in 2004, as sales expectations are more conservative. We will expect approximately $5 million from these changes in 2004. So, altogether, these cost reductions and margin improvements discussed here have been specifically identified and they have a definite timeline, should provide an approximate $15 million benefit next year. and as we speak, we are continuing to evaluate options for another $5 million through pricing adjustments, other cost reductions and margin improvements. We will be providing full-year guidance for North America during our call in January, but obviously these initiatives are aimed at reducing the losses while we're trying to grow back our business. Let me take a minute to discuss a change in our sales force to this date. In certain markets in Asia Pacific, our business model is very different, such as in China where we sell through store fronts. In this and a couple of other markets our sales force totals have evolved to include individuals who are more customers than sellers. We have therefore decided to remove these customer members out of our sales force numbers only in these few select Asian markets. We believe this will improve the relationship between sales force size and sales trends, and there will be no impact of this reclassification on sales in these markets.

The prior and reclassified numbers have been disclosed on the supplement schedule to the earnings release. With this change, the trends you will notice is probably closer to the sales trends in these markets. Let me turn to the outlook for the year. There has been no change from September 24th call, where we indicated full-year expectations of 76 to 81 cents per diluted share including a 9-cent positive impact from foreign currency. The fourth quarter will include, as we said before a one-time $3 million charge for cost restructuring in the U.S. Additionally, since we now operate under an important distributor model in Argentina, which reduces our exposure to the volatile environment there, we dissolving the legal entity in the fourth quarter, resulting in a one-time $2.5 million non cash charge to write off the remaining net investment there. This does not change our full-year expectation, as this decision is expected to have a favorable tax impact. We would like to continue to reinforce our commitment to the dividend. We expect 55 to 60 million of cash flow from operations after capital expenditures, which will cover our 88 cents per share dividend of approximately $51 million.

At the end of the third quarter, the net worth covenant had an approximate $30 million cushion, and if results remain flat next year, the dividend will remain secure, and we do not expect any deterioration in operating results. As regards our 2004 expectations, we will communicate them when we report our fourth quarter results in January. At this point I would like to turn the call over for questions.

Thank you. Today's session will be conducted electronically. If you would like to ask a question, press the star key followed by the digit 1. We will proceed in the order that you signal. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, if you would like to ask a question, please press star-1. We will pause for a moment to give everyone as opportunity to signal. We will take our first question from Kelly Nash with McDonald investments.

I have just two quick questions. The IDA is a percentage of sales in the quarter. Can you tell us a little bit about that, particularly here in the U.S. and how that compares with the third quarter last year?

Yeah. Firstly, last year in the U.S., it was 7%, 14% this year. What distorts it a little bit, though, is the decline in the U.S. core party sales this year, so we think it's on track. I mentioned, Kelly, that particularly the Internet and our television shopping business was way up. You saw very positive in not only the number of showcases but also their productivity in the third quarter, but the real -- what distorts that from 7 to 14 is more the decline in the other side of the business. But progress continues, and we were so pleased to see the average sales per showcase go up fairly dramatically.

Great. Then, when you mention efforts to really bring -- expand the Taste of Tupperware, is there anything more specific that you can talk about as far as initiatives?

)) Yeah. What we're doing is, learning from our BeautiControl experience, is if you let the normal gestation period happen, there we only had a fourth of ours doing it after a year, and we learned a great deal from that. One of the other things we learned from that is one of the major reasons for that is that new experience was more interactive, and the more seasoned sellers or holders of those kinds of parties felt out of control and it felt more chaotic. So what we're starting out with right now is training her that chaos is an entertaining environment, the sales are greater and if you get used to it, it's a good thing. We have come out with a new DVD training program on that. We have done a road show across the country in many different areas, where we basically did expos in hotels of here's what the Taste of Tupperware looks like, for them to enjoy some of their customers in that. We've done other things very much along those lines. When Ms. A Taste of Tupperware party, she wears a white chef's coat. and, you know, all of it is -- starts off with having a kit that focuses her on that kind of party so that it's easy to get there. So it's my hope that we get to more than 25% of the sales force by the end of the year, but it will take time. By the way, this is our record breaker month for us, and one of the things we have really put pressure on our senior management team is the best way to lead is by example, and for everybody to have a Taste of Tupperware party. I had one at my house last night hosted by my wife, sold over $4,000. It was chaos, but it's a very different kind of environment, and it's overdue, and it really does send the signal that the Tupperware party isn't what it was.

and are you still seeing sales? You mentioned I think 15% higher were early indications. Are you still seeing Taste of Tupperware party sales that much higher?

Absolutely. The three metrics we're really seeing is the average bookings off the party are more significant. The average sales are better, and recruiting from a Taste of Tupperware are better, so we're pleased with that. But it will take time. I don't want us to get ahead of ourselves on this.

Okay. One final question. On Korea, do you have any expectations to when you might see some improvement in that market?

I'll know more this -- you know, by the beginning of next week. I have had three members of our senior management team there over the last 90 days who have come back with recommendations, but one of the things that we've done is to really reduce the expense base there, so if it takes longer than we like, it isn't as much of a drain on us. What they're going to share with me is a lot of findings this next week. We have a great managing director on the ground that formally -- he's Australian, which formerly had a cluster of our businesses in Europe, and also he's the one that led the turnaround of South Africa, so I have confidence that we have the right people on the ground.

Great. Thanks so much.

Thank you, Kelly.

We will takes our next question from Rex Henderson of Raymond James. Please go ahead.

First of all, a housekeeping question. Your tax benefit was about 100% of your pretax loss. Can you explain what that is and how you achieve that, and whether or not we should expect any further tax benefits going forward?

The reason the tax rate declined really this quarter was because of the picks of profits. I mean, our U.S. business attracts the highest tax rate as the U.S. has declined in profitability, the tax rate went down. Now, the other transaction is the Argentine closure of the legal entity there, which will have a further decline of the tax rate.

Can you give me any sense of what it will be in the fourth quarter?

It will be about $2.5 million benefit. The CTA, essentially the write-off in the Argentine net investment there, that will be covered by the tax benefit.

You're saying there will be a net benefit of $2.5 million in the fourth quarter, or off of what your taxes otherwise would have been?

That's the benefit that we will expect by the Argentine write-off, yes.

Okay. Secondly, you did some print advertising in the last couple months in order to generate some interest in the Taste of Tupperware parties and some recruiting. Can you give us any sense of what the response was, and whether or not you plan to do any more?

We're on a selective basis going to do more print advertising, particularly in the U.S. business to get the new Taste of Tupperware experience out. By the way, we're doing this along with our fairly extensive public relations program, where we're spending a few million with public relations. That will be the essence of the message. How we're also using that, though, is we're using reprints from not only people, but the other magazines we're using. So the sales force members can use reprints from these to really place it out there to spur interest. We just find in direct sales, it's a more effective and most effective way of getting the word out there.

Okay.

But don't expect really us to dial up the advertising and public relations budge near term, but it certainly is effective.

Okay. Can you give us any metrics -- did you get any response from those ads in terms of bookings --

Yes.

or potential recruits?

Yes, we did. But we don't make that public. Thank you.

All right. Thank you.

If you would like to ask a question at this time, please press star-1. We will take our next question from Doug Lane (ph) with Avondale (ph) Partners. Go ahead.

Good morning. Two questions. First in the North America business Where we saw the drop in the average active from 20 and change to 15 and change as far as thousands, it sounds like, with the 15,384, that comparison is such by the third quarter of next year we should by up on a year-over-year basis. Do you expect sequentially that's the bottom as well and that beginning in the fourth quarter we should see at least sequential improvement, even though we won't see year over year improvement until the back half of next year?

Doug, firstly, the first part of your question, I certainly would not believe it's unreasonable that by the third quarter of next year that we start to lap ourselves on that. Whether it happens in the fourth quarter or not, I don't know at this point. What I will tell you is that we've had now eight, maybe nine weeks of consecutive very dynamic double digit growth in the recruiting. However, during the early stages of that last eight weeks, we still had a fairly significant level of removal, so we weren't getting the net increases we wanted to see. If you see where the sales decline comes from the U.S., you see the sales force is down just under 20%, but the average active sales force is down much more than that, and that's what's really driven that [inaudible], we do -- when we date parties you -- we hope to date one, to one and a half parties. I've said that on a call before, but you always have about 20% of your parties cancel. Things come up. We saw this party cancellation rate get to nearly 50%. How that translates is to lower levels of activity of the people. It will take some time before the warm turns on that. So it's an important quarter for us, the fourth quarter. I think morale is good, momentum is increasing as far as the size of the sales force and their recruiting trends. I would hope we with start recording some increases there.

Okay. In the other area -- thanks for that. In Latin America, do you have a timetable in your mind for ramping up your business in Brazil with the BeautiControl catalog?

Yeah. What we basically have done with our Brazil business down there is contained our expense base in Brazil while at the same time we're going through the investment process of getting government approvals to get into this new category down there and getting products. But we're not going to move forward aggressively in Latin America until we perfect the model in Mexico. I don't want to have two different learning laboratories going on at the same time. No one's ever done this big conversion of a direct sales company from selling one product line to mostly selling another product line. We know it's got to be our future down there. It's where 55% of all cosmetics products are sold via direct selling, and less than 4% of our product category is sold via direct selling. So we have to go down this road, but I want to get it perfected in the most cost-effective way. and we are doing that in Mexico

Realistically this is more of an '05 thing than an '04 thing...from what you saying today

Probably directionally, that's right. You know, I would hope to be able to report to all of you, though, just like we're reporting quarterly, what we're doing as a percent of sales in Mexico. That should be a signal on the take of the sales force, and I would hope that you -- it may not happen every single quarter, but year over year you start to see fairly dramatic improvement with regard to the product mix that is beauty going forward. and at another point in time, it will lap our Tupperware business.

I know you mentioned this before, but what was that number in the third quarter?

It was 8%.

and the second quarter?

Six or seven. I must say, because I was just there at our jubilee. We have never had it as the Germans would say the main dish of a jubilee. The main dish was all the good things happening in your core Tupperware product line, but now come to real BeautiControl training, and we had the top makeup artist in Mexico on stage for -- he did four different sessions of training sessions, and all I can tell you is they sold out of inventory after the second session of starter kits of this, and every one of these sessions, which they didn't have to go to these sessions. They could have gone out to the beach. They were at capacity, standing room only. So I'm seeing very positive take. You know what I'm hearing from our longest-serving distributors in Mexico? She's say this is basically enabling me to get to a younger woman than I was recruiting in my core Tupperware business, and so we like that. That's what we've been trying to do. That's where -- the bulk of the population in Mexico is less than 20 years old.

Okay. Thank you.

We will take our next question from Rommel T. Dionisio of Roth Capital Partners

Can you talk more about the impact of the flooding in Mexico. I noticed the recruiting numbers were double digits in Latin America ? Was that partly an impact of the flooding?

No. I mean, it's been impacted by the flood. That's been going on for more than a month now. By the way, so much of the economy is there? District federalle. We have many of our distributorships right there. It's impacted other direct sellers. Yes, coming out of holding parties, we get a lot of our recruits from those. That's impacted it, but those negative trends, Rommel, are now dissipating. So we're starting to get some traction again.

Okay. Thanks, Rick.

We will take our next question from Milton Nobis(ph) with Winfield (ph) Capital .

I just wanted to go over this balance sheet improvement I mean, clearly the cap did improve -- debt to capital did improve significantly when you look back 12 months, but a major part of that improvement took place in the fourth quarter of last year, and actually if you look at net debt this year, it's actually up from where it was on January 1st. So how -- I mean, is this -- do you have a particularly seasonal opportunity in the fourth quarter to get the [inaudible]%? Obviously you did something significant last year in the fourth quarter. Could you clarify that a bit?

Sure. Our business is fairly seasonal, so I believe the best comparison is the same period prior year. Yes, we've been having working capital improvements, I think the last six quarters, but we continue to show improvements. If you look at the receivables, they are considerably better over the last year. Inventory's a bit up, but as I said, most of that is currency. and fourth quarter is our best cash-generating quarter. So we are at 62% right now, and we do expect to get down to the 55% by the end of this year.

So inventories will probably come down, and we'll see accounts payable go up, that kind of stuff?

Yes.

Okay. Thanks.

Thank you.

Once again, ladies and gentlemen, if you would like to ask a question, please press star-1 at this time. We will take our next question from Don Tucker with Edward Jones. Please go ahead.

Thanks you very much for your communication, gentlemen. Just a couple quick questions. I got a little distracted there. Could you cover the dividend policy coming up again? and second, how are your land sales going?

We've been paying 88 cents a share for the dividend, and we plan to continue that. We believe we have the cash flow to cover the dividend, and second, we have a net worth test in our revolver agreement that we have to pass on our dividend. We have about $30 million of cushion, and as I said in my -- in the call, as long as earnings don't deteriorate anymore next year, we should be fine with paying the dividend. At this point, we are fairly confident that earnings will not deteriorate any more. The net of your question is, yes we believe the dividend will continue.

On the land sales, that's going very smoothly. When we spun the company off, there were, you know, more than 1,000 acres that was adjoining our property here, and part of our negotiation was to gain control of that property, because we saw great value in the future. We've gotten all the approvals on that, and we've got right now $30 million in contracts right now. The only issue has been with regard to us negotiating local impact fees, etc., and we don't want to be disadvantaged, so we've got those good contracts here. By the way, on many of the sites first of all, the infrastructure that's in place is a bypass around, called the greenway, that highway is already finished and done, and it's adjacent to our property. The Florida turnpike, an exit is there already adjacent to our property. This is since we've done the spin-off. We already have anchors up in number of those, Lowe's, BJ's, club's, so this is out in the sticks right now. There's a lot of brick and mortar out there. That's our question, how long will it take us to get this -- negotiate these government impact fees. Tom [inaudible] our general counsel is leading that process, and we are not going to roll over and pay the high fees and he's going forward prudently on it. So I would expect to see a lot of this happen this next year.

and the cash flow out of that would go towards debt?

Well, we don't have very much more debt to repay, because if you look through our balance sheet, we have two business pieces, one up in 2006, and the other in 2011. So my estimation is by the end of this year we will paid almost all of our short-term debt. As we generate cash this next year, we have a few choices to make. We definitely will not do an acquisition. We have said we will not do a dividend increase, so our choices are do we buy back stock or should we hold cash on the balance sheet? and that's a decision that will be a year from now that we would have to make.

Our number right now is, as we've said, the land's worth $80 to $90 million. That number is two years old. The longer it takes to close, the more it's worth. But our biggest decision will be with these proceeds, which are mostly tax sheltered, what are we going to use it for?

Anything further, Mr. Tucker?

No. Thank you.

We will take a follow-up question from Doug Lane with Avondale partners.

Just to follow up on the cash flow. What is the status of the stock buy book here? Do you have one authorized now? [inaudible] can you just elaborate on that a little bit?

No, we don't at this point. This is a question we would have to come to next year. Most of our cash is generated in the last quarter of the year. As we get into next year, we'll be discussing it.

We did, Doug, a $5 million share repurchase some years ago. The board of directors were the ultimate responsibility for making that decision. It's shown a positive bias that there are other needs to that approach.

Is that the only hurdle here, getting board approvals for another buy back?

I don't view it as a hurdle. We will, at that period of time, look at what are the other options for us to use that cash for at that time. We could utilize some of that cash with regard to some of our markets out there for the pension funds. We're just going to review it at that time.

Okay. Let me put it this way, then. This is a board decision, this doesn't have to be run by your banks or your lenders?

No. We're meeting all our commitments to our bankers.

Okay. Thank you.

We will take our next question from Rob Schwartz with Jael (ph) Advisers.

Just a clarification on the land sales. You have $30 million of contracts that are signed already? and if that is the case, the remaining $80, $90 million, can you talk about a time line of when you expect to complete those and when you expect the $30 million to close?

We have they are signed contracts. It's almost like a pig working its way through the python. There are always new contracts coming in, and we've said in the past, it probably will take three to four years, but see, we don't have any government approvals to do this. The zoning, all the hard stuff is done, and the intersections are all in place, the major highways are all in place. It's -- and you know, as soon as some of the anchors go up, that's when it starts to move even faster. We're dealing with one hurdle right now, as we're just not going to roll over and pay extra ordinate impact fees to local government. So Tom is negotiating right now.

Okay. The three to four years that's from

We said three to four years, and said that two years ago.

So we're looking at the end of '04 or '05?

More '05.

At the end of '05 at the latest?

Right.

Gentlemen, at this time there are no additional questions. Mr. Goings, I will turn the call back over to you for closing comments.

We feel the momentum in our business, and particularly our European business has helped us greatly this year. Looking at the size of the sales force there, that it's likely to continue throughout the remainder of this next year. I might add that I'll have a better feel for progress in our Asia Pacific businesses as a return from this trip, but we're on plan there, and the same with regard to Latin America. The U.S. business I look forward to our conversation in January. I would expect to see some progress in the fourth quarter in our U.S. business, and increased take on the size of our Taste of Tupperware party, growths in our sales force, but again it will be the middle of next year before we close the gap in the U.S. We thank you for your interest in Tupperware.

This does conclude the Tupperware third quarter 2003 earnings results conference call. We do thank you for your participation. You may disconnect at this time