Fourth Quarter Highlights
* Worldwide net sales up 14 percent from the prior year;
* Domestic gross sales up 15 percent and international gross sales up 15
percent;
* Worldwide gross sales for core brands: Barbie(R) up 3 percent; Hot
Wheels(R) up 9 percent; Core Fisher-Price(R) up 15 percent and American
Girl(R) brands up 2 percent;
* Gross margin increased 20 basis points of net sales; SG&A increased 110
basis points of net sales;
* Operating income as a percentage of net sales was 18.4 percent, up 90
basis points; and
* Earnings per share of $0.75 vs. prior year of $0.69 (prior year includes
tax benefit of $0.11).
Full-Year Highlights
* Worldwide net sales up 9 percent from the prior year;
* Domestic gross sales up 8 percent and international gross sales up 11
percent;
* Worldwide gross sales for core brands: Barbie(R) flat; Hot Wheels(R) up 2
percent; Core Fisher-Price(R) up 11 percent and American Girl(R) brands up
1 percent;
* Gross margin increased 40 basis points of net sales; SG&A increased 100
basis points of net sales;
* Operating income as a percentage of net sales was 12.9 percent, up 10
basis points; and
* Earnings per share of $1.53 (includes tax benefit of $0.16 per share) vs.
prior year of $1.01 (includes American Jobs Creation Act-related tax
expense of $0.26 per share and tax benefit of $0.09 per share).
EL SEGUNDO, Calif., Jan. 29 /PRNewswire-FirstCall/ -- Mattel, Inc.
(NYSE: MAT) today reported 2006 fourth quarter and full-year financial
results. For the quarter, the company reported net income of $286.4
million, or $0.75 per share, compared to last year's fourth quarter net
income of $279.2 million, or $0.69 per share. For the year, the company
reported net income of $592.9 million, or $1.53 per share, compared to last
year's net income of $417.0 million, or $1.01 per share.
"I am pleased with our 2006 results as we made good progress in
addressing the two key challenges facing the company: U.S. sales declines
in the Barbie(R) brand and pressure on our gross margins," said Robert A.
Eckert, chairman and chief executive officer of Mattel. "Barbie(R)'s
domestic gross sales grew for the year with four consecutive quarters of
U.S. growth and our gross margins also grew in 2006, the first increase
since 2003. Although positive trends, we have more to achieve on both
fronts."
On October 3rd, 2006, the company completed the acquisition of Radica
Games Limited, the maker of electronic entertainment toys. The acquisition
is included in Mattel's fourth quarter and full-year results within the
Mattel Girls & Boys Brands Entertainment business which also includes Games
and Puzzles.
Financial Overview
For the quarter, net sales were $2.11 billion, a 14 percent increase
from $1.84 billion last year, and included a favorable impact from changes
in currency exchange rates of 2 percentage points. On a regional basis,
fourth quarter gross sales increased 15 percent in the U.S. and were up 15
percent in international markets, which included a favorable impact from
changes in currency exchange rates of 5 percentage points. Operating income
for the quarter was up 21 percent at $388.7 million.
For the year, net sales were $5.65 billion, a 9 percent increase from
$5.18 billion last year, and included a benefit from changes in currency
exchange rates of 1 percentage point. On a regional basis, full-year gross
sales were up 8 percent in the U.S. and were up 11 percent in international
markets, which included a benefit from changes in currency exchange rates
of 2 percentage points. Operating income for the year was $728.8 million,
an increase of 10 percent compared to the prior year.
The company's debt-to-total capital ratio of 22.3 percent is in line
with the company's capital and investment framework, and its year-end cash
balance was $1.21 billion. During 2006, the company repurchased 11.8
million shares of its common stock at a cost of approximately $193 million.
Mattel Girls & Boys Brands
Fourth quarter worldwide gross sales for the Mattel Girls & Boys Brands
business unit were $1.24 billion, up 17 percent versus a year ago, and
included $62.5 million of gross sales for Radica(R). Worldwide gross sales
for the Barbie(R) brand were up 3 percent and worldwide gross sales for
Other Girls Brands were up 8 percent. Worldwide gross sales for the Wheels
category, which includes the Hot Wheels(R), Matchbox(R) and Tyco(R) R/C
brands, were up 5 percent. Worldwide gross sales for the Entertainment
business, which includes Radica(R) and Games and Puzzles, were up 62
percent for the quarter.
For the year, worldwide gross sales for the Mattel Girls & Boys Brands
business unit, including fourth quarter sales of Radica(R), were $3.42
billion, or up 9 percent. Worldwide gross sales for the Barbie(R) brand
were flat. Worldwide gross sales for Other Girls Brands were up 11 percent
for the year.
Worldwide gross sales for the Wheels category were down 1 percent.
Worldwide gross sales for the Entertainment business, including Radica(R)
and Games and Puzzles, were up 34 percent.
Fisher-Price(R) Brands
Fourth quarter worldwide gross sales for the Fisher-Price(R) Brands
business unit, which includes the Fisher-Price(R), Little People(R), and
Power Wheels(R) brands, were $805.9 million, up 16 percent due to strong
worldwide sales of Core Fisher-Price(R) and Fisher-Price(R) Friends.
For the year, worldwide gross sales for the Fisher-Price(R) Brands
business unit were $2.27 billion, up 12 percent driven by double-digit
sales growth of Core Fisher-Price(R) and Fisher-Price(R) Friends.
American Girl(R) Brands
Fourth quarter gross sales for the American Girl(R) Brands business
unit, which offers American Girl(R) branded products direct to consumers,
were $245.2 million, up 2 percent.
For the year, gross sales for the American Girl(R) Brands business unit
were $440 million, up 1 percent, primarily due to the opening in Los
Angeles of the third American Girl Place(R) retail store.
Live Webcast
Mattel will webcast its 2006 fourth quarter and year-end earnings
conference call at 8:30 a.m. Eastern time (5:30 a.m. Pacific time) today.
The conference call will be webcast on the "Investors & Media" section of
the company's corporate Web site, http://www.mattel.com. To listen to the live
call, log on to the Web site at least 15 minutes early to register,
download and install any necessary audio software. An archive of the
webcast will be available on the company's Web site for 90 days and may be
accessed beginning two hours after the completion of the live call. A
telephonic replay of the call will be available beginning at 11:30 a.m.
Eastern time (8:30 a.m. Pacific time) the morning of the call, until
Tuesday, January 30th at midnight Eastern time (9 p.m. Pacific time) and
may be accessed by dialing + (719) 457-0820. The passcode is 1095540.
Information required by Securities and Exchange Commission Regulation
G, regarding non-GAAP financial measures, as well as other financial and
statistical information, will be available at the time of the webcast on
the "Investors & Media" section of http://www.mattel.com, under the sub-headings
"Financial Information" -- "Earnings Releases."
About Mattel
Mattel, Inc., (NYSE: MAT) (http://www.mattel.com) is the worldwide leader in
the design, manufacture and marketing of toys and family products,
including Barbie(R), the most popular fashion doll ever introduced. The
Mattel family is comprised of such best-selling brands as Hot Wheels(R),
Matchbox(R), American Girl(R), Radica(R) and Tyco(R) R/C, as well as
Fisher-Price(R) brands (http://www.fisher-price.com), including Little People(R),
Rescue Heroes(R), Power Wheels(R) and a wide array of
entertainment-inspired toy lines. With worldwide headquarters in El
Segundo, Calif., Mattel employs more than 30,000 people in 43 countries and
territories and sells products in more than 150 nations throughout the
world. The Mattel vision is to be the world's premier toy brands -- today
and tomorrow.
Note: Forward-looking statements with respect to the financial
condition, results of operations and business of the company are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those set forth in such statements. These include without
limitation: the company's dependence on the timely development,
manufacture, introduction and customer acceptance of new products; the
seasonality of the toy business; customer concentration and pricing;
significant changes in buying and payment patterns of major customers,
including as a result of bankruptcy and store closures; adverse changes in
general economic conditions in the U.S. and internationally, including
adverse changes in the retail environment, employment and the stock market;
order predictability and supply chain management; the impact of competition
(including from sellers of a broad range of play products including video
games and consoles, consumer electronics, and retailers' private label
products) on revenues and margins; the supply and cost of raw materials
(including oil and resin prices), components, employee benefits and various
services; the effect of currency exchange rate fluctuations on reportable
income; risks associated with acquisitions and mergers; the possibility of
product recalls and related costs; risks associated with foreign
operations; negative results of litigation, governmental proceedings or
environmental matters; changes in laws and regulations; possible work
stoppages, slowdowns or strikes; possible outbreaks of SARS, bird flu, or
other diseases; political developments and the threat or occurrence of war
or terrorist acts; the possibility of catastrophic events; the inherent
risk of new initiatives; and other risks and uncertainties as may be
detailed from time to time in the company's public announcements and SEC
filings. This release contains forward-looking statements about the
company's debt-to-total capital ratio in relation to the company's capital
and investment framework, performance of the Barbie(R) brand and the
company's gross margins. Mattel does not update forward-looking statements
and expressly disclaims any obligation to do so.
MATTEL, INC. AND SUBSIDIARIES EXHIBIT I
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended December 31,
(In millions, except per share 2006 2005 Yr/Yr
and percentage information) % Net % Net %
$ Amt Sales $ Amt Sales Change
Net Sales $2,108.8 $1,842.9 14%
Cost of sales 1,096.5 52.0% 962.2 52.2% 14%
Gross Profit 1,012.3 48.0% 880.7 47.8% 15%
Advertising and promotion
expenses 255.6 12.1% 256.7 13.9% 0%
Other selling and
administrative expenses 368.0 17.5% 302.3 16.4% 22%
Operating Income 388.7 18.4% 321.7 17.5% 21%
Interest expense 26.0 1.2% 22.4 1.2% 16%
Interest (income) (8.5) -0.4% (5.4) -0.3% 56%
Other non-operating
(income), net (2.1) (1.1)
Income Before Income Taxes 373.3 17.7% 305.8 16.6% 22%
Provision for income taxes 86.9 26.6
Net Income $286.4 13.6% $279.2 15.1% 3%
EPS - Basic $0.76 $0.70
Average Number of Common Shares
Outstanding - Basic 378.3 400.2
EPS - Diluted $0.75 $0.69
Average Number of Common and
Common Equivalent Shares
Outstanding - Diluted 384.0 402.5
For the Year Ended December 31,
(In millions, except per share 2006 2005 Yr/Yr
and percentage information) % Net % Net %
$ Amt Sales $ Amt Sales Change
Net Sales $5,650.2 $5,179.0 9%
Cost of sales 3,038.4 53.8% 2,806.1 54.2% 8%
Gross Profit 2,611.8 46.2% 2,372.9 45.8% 10%
Advertising and promotion
expenses 651.0 11.5% 629.1 12.1% 3%
Other selling and
administrative expenses 1,232.0 21.8% 1,079.3 20.8% 14%
Operating Income 728.8 12.9% 664.5 12.8% 10%
Interest expense 79.9 1.4% 76.5 1.5% 4%
Interest (income) (30.5) -0.5% (34.2) -0.7% -11%
Other non-operating
(income), net (4.4) (29.8)
Income Before Income Taxes 683.8 12.1% 652.0 12.6% 5%
Provision for income taxes 90.9 235.0
Net Income $592.9 10.5% $417.0 8.1% 42%
EPS - Basic $1.55 $1.02
Average Number of Common Shares
Outstanding - Basic 382.9 407.4
EPS - Diluted $1.53 $1.01
Average Number of Common and
Common Equivalent Shares
Outstanding - Diluted 386.4 411.0
MATTEL, INC. AND SUBSIDIARIES EXHIBIT II
WORLDWIDE GROSS SALES INFORMATION (Unaudited)
(In millions, except Three Months Ended December 31,
percentage information) 2006 2005
Worldwide Gross Sales:
Mattel Girls & Boys Brands $1,238.8 $1,055.6
% Change 17% -6%
Pos./(Neg.) Impact of
Currency (in % pts) 3 0
Fisher-Price Brands 805.9 694.8
% Change 16% 6%
Pos./(Neg.) Impact of
Currency (in % pts) 2 0
American Girl Brands 245.2 240.6
% Change 2% 12%
Other 11.6 12.6
Gross Sales $2,301.5 $2,003.6
% Change 15% 0%
Pos./(Neg.) Impact of
Currency (in % pts) 2 0
Reconciliation of GAAP to
Non-GAAP Financial Measure:
Gross Sales $2,301.5 $2,003.6
Sales Adjustments (192.7) (160.7)
Net Sales $2,108.8 $1,842.9
% Change 14% 0%
Pos./(Neg.) Impact of
Currency (in % pts) 2 (1)
(In millions, except Year Ended December 31,
percentage information) 2006 2005
Worldwide Gross Sales:
Mattel Girls & Boys Brands $3,423.7 $3,138.7
% Change 9% -3%
Pos./(Neg.) Impact of
Currency (in % pts) 1 1
Fisher-Price Brands 2,269.4 2,023.9
% Change 12% 5%
Pos./(Neg.) Impact of
Currency (in % pts) 1 0
American Girl Brands 440.0 436.1
% Change 1% 15%
Other 24.9 24.8
Gross Sales $6,158.0 $5,623.5
% Change 10% 1%
Pos./(Neg.) Impact of
Currency (in % pts) 1 0
Reconciliation of GAAP to
Non-GAAP Financial Measure:
Gross Sales $6,158.0 $5,623.5
Sales Adjustments (507.8) (444.5)
Net Sales $5,650.2 $5,179.0
% Change 9% 1%
Pos./(Neg.) Impact
of Currency (in % pts) 1 1
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III
CONDENSED CONSOLIDATED BALANCE SHEETS
At December 31,
2006 2005
(In millions) (Unaudited)
Assets
Cash and equivalents $1,205.6 $997.7
Accounts receivable, net 943.8 760.6
Inventories 383.1 376.9
Prepaid expenses and other current
assets 317.6 277.3
Total current assets 2,850.1 2,412.5
Property, plant and equipment, net 536.7 547.1
Other noncurrent assets 1,569.1 1,412.7
Total Assets $4,955.9 $4,372.3
Liabilities and Stockholders' Equity
Short-term borrowings $-- $118.0
Current portion of long-term debt 64.3 100.0
Accounts payable and accrued
liabilities 1,356.3 1,062.4
Income taxes payable 161.9 182.8
Total current liabilities 1,582.5 1,463.2
Long-term debt 635.7 525.0
Other noncurrent liabilities 304.7 282.4
Stockholders' equity 2,433.0 2,101.7
Total Liabilities and
Stockholders' Equity $4,955.9 $4,372.3
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited)
(In millions, except days and At December 31,
percentage information) 2006 2005
Key Balance Sheet Data:
Accounts Receivable, Net
Days of Sales Outstanding (DSO) 40 37
Inventories
Days of Supply (DOS) 73 77
Total Debt Outstanding $700.0 $743.0
Total Debt-to-Total Capital
Ratio 22.3% 26.1%
Year Ended December 31,
(In millions) 2006(a) 2005
Condensed Cash Flow Data:
Cash Flows From Operating Activities $876 $467
Cash Flows (Used For) Investing
Activities (315) (82)
Cash Flows (Used For) Financing
Activities and Other (353) (544)
Increase (Decrease) in Cash and
Equivalents $208 $(159)
(a) Amounts shown are preliminary estimates. Actual amounts will be
reported in Mattel's Annual Report on Form 10-K for the year ended
December 31, 2006.
SOURCE Mattel, Inc.
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Related links:
http://www.fisher-price.com
http://www.mattel.com
http://www.prnewswire.com/comp/540363.html /
CONTACT:
News Media, Lisa Marie Bongiovanni,
+1-310-252-3524, LisaMarie.Bongiovanni@mattel.com, or Securities
Analysts, Joleen Jackson, +1-310-252-2702,
Joleen.Jackson@mattel.com, both of Mattel, Inc.
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