Tupperware Brands Corp. couldnt keep the lid on the accounting problems in its Russian unit when announcing its second-quarter financial results this week.
While the Orlando, Fla.-based container maker reported a record profit in the second quarter on Monday, it also fessed up to some out-of-period adjustments that lowered the companys pretax income by approximately $10.4 million and net income by $8.8 million, or 14 cents per diluted share.
Apparently the Russians did it, and they werent even spies. The adjustments were related to errors identified in the financial reporting of Tupperwares Russian subsidiary. Of the pre-tax amounts, Tupperware acknowledged that approximately $4.2 million should have been reflected in the first quarter of 2010 and $6.2 million in periods prior to 2010.
Tupperware said it believes that the accounting errors identified were unique to its Russian subsidiary and will develop a plan to improve its system of internal control while evaluating the overall impact of the deficiencies on its internal control over financial reporting.
Management understands the importance of internal controls, and is very disappointed with what happened, said Tupperware chairman and CEO Rick Goings in a statement. We have confidence that we have identified the resulting errors from the issues in this market and that this is an isolated matter.
Hopefully the next time he visits Moscow, the accounting department will make it up to him by sending him home with a nice container of caviar.