Tupperware stock soars 90% after debt restructuring agreement

By James Rogers

Agreement sends Tupperware's stock hurtling toward a 9-month high

Tupperware Brands Corp.'s stock climbed more than 90% in extended trading Thursday after the beleaguered maker of iconic food containers announced a debt restructuring agreement.

The surge sent the stock hurtling toward a nine-month high. In a statement released after market close, Tupperware (TUP) said that it has finalized an agreement with its lenders to restructure its existing debt obligations. The agreement will improve the company's overall financial position by amending certain credit obligations and extending the maturity of certain debt facilities to allow it to continue with its turnaround efforts, Tupperware said.

The agreement provides for the reduction/reallocation of $150 million in interest and fees, and an extension of the stated maturity of approximately $348 million of principal and reallocated interest and fees to fiscal year 2027 with payment-in-kind, or PIK, interest.

Related:Tupperware and Yellow have skyrocketed, but don't confuse them with meme stocks

Tupperware also announced the reduction of amortization payments required to be paid through fiscal year 2025 by approximately $55 million, and immediate access to a revolving borrowing capacity of approximately $21 million.

"I am confident that this agreement provides us with the financial flexibility to continue executing on our near-term turnaround efforts as well as our long-term strategy to create a global omni-channel consumer brand," Tupperware CFO Mariela Matute said in the statement. "We are committed to making ongoing progress in improving liquidity and strengthening our capital structure. We appreciate the support of our lenders, who share in our strategy, as we move forward."

Related: How 'left-for-dead' Tupperware became a buzzy trading play

In April, Tupperware issued a going-concern warning, essentially cautioning that it could go bust. The beleaguered company also announced the hiring of financial advisers to help it navigate its near-term challenges. On July 7, Tupperware said that it had entered a waiver agreement with some of its creditors.

Also on Thursday, Tupperware said that its second-quarter earnings report will be filed late. In an SEC filing, Tupperware explained that it is unable to file its report for the quarter ended July 1 by the prescribed due date. Tupperware cited "the time and effort" required to complete its consolidated financial statements for its Form 10-K annual report for the fiscal year ended Dec. 31, 2022 and the Form 10-Q for the quarter ended April 1, 2023. "The company will be unable, without unreasonable effort or expense, to complete and file the Q2 Form 10-Q within the prescribed time period," it said. "As previously disclosed on its Form 8-K on April 7, 2023, the Company is continuing its restatement of previously issued financial statements and the financial statement close process for the year ended December 31, 2022."

Since the 8-K filing, Tupperware has "identified additional prior period misstatements and additional material weaknesses in internal control over financial reporting," the company said. The April 7 8-K filing also disclosed the company's "substantial doubt" about Tupperware's ability to continue as a going concern. "While the Company is still completing its second-quarter 2023 financial close process, it expects that its Q2 Form 10-Q will reflect a material decline in revenues for the quarter ended July 1, 2023 as compared to the quarter ended June 25, 2022," Tupperware said in the filing. "The Company believes that its preliminary estimated revenue results for the quarter ended July 1, 2023 will be within the range of $260-$270 million."

Related:Tupperware stock skyrockets to a record 434% gain in July

Tupperware's stock has skyrocketed recently, despite a dearth of fresh news. Nonetheless, Tupperware should not be confused with a meme stock, according to Samantha LaDuc, founder of LaDucTrading.com. Tupperware's recent trading activity is also reminiscent of spikes in other names also recently seen as "left for dead," as LaDuc put it to MarketWatch last week.

-James Rogers

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08-04-23 0844ET

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