First Quarter Highlights
* Worldwide net sales flat;
* Domestic gross sales down 5 percent and international gross sales up
6 percent;
* Worldwide gross sales for core brands: Barbie(R) down 15 percent; Hot
Wheels(R) down 2 percent; Core Fisher-Price(R) flat and American
Girl(R) brands up 25 percent;
* Gross margin decreased 110 basis points of net sales; SG&A decreased
20 basis points of net sales;
* Operating income as a percentage of net sales was 0.7 percent, down
90 basis points; and
* Earnings per share of $0.02 vs. prior year of $0.02.
EL SEGUNDO, Calif., April 15 /PRNewswire-FirstCall/ -- Mattel, Inc.
(NYSE: MAT) today reported 2005 first quarter financial results. For the
quarter, the company reported net income of $6.5 million, or $0.02 per share,
compared to last year's first quarter net income of $9.0 million, or $0.02 per
share.
"Following last year's encouraging holiday season, our early 2005 results
were disappointing," said Robert A. Eckert, chairman and chief executive
officer of Mattel. "We will be adjusting programs for the balance of the year
with the goal of continuing to build market share and improving financial
performance."
Financial Overview
For the quarter, net sales were $783.1 million, flat compared to
$780.9 million last year, which included a benefit from changes in currency
exchange rates of 2 percentage points. On a regional basis, first quarter
gross sales decreased 5 percent in the U.S., and were up 6 percent in
international markets, which included a benefit from changes in currency
exchange rates of 4 percentage points. Operating income for the quarter was
down 57 percent at $5.5 million, primarily due to lower gross margin.
The company's debt-to-total-capital ratio of 20.2 percent is in line with
the company's long-term goal. Consistent with the seasonality of the
business, during the quarter the company's cash and equivalents declined by
approximately $378 million, compared with a decline of approximately
$365 million in last year's first quarter.
Sales by Business Unit
Mattel Brands
For the first quarter, worldwide gross sales for the Mattel Brands
business unit were $514.4 million, a 3 percent decrease versus the prior
year's first quarter. Worldwide gross sales for the Barbie(R) brand were down
15 percent. Worldwide gross sales of Other Girls Brands, which includes Polly
Pocket!(TM) and several new brand introductions, including Winx Club(TM),
Doggie Daycare(TM) and Pound Puppies(R), were up 10 percent. Worldwide gross
sales for the Wheels category, which includes the Hot Wheels(R), Matchbox(R)
and Tyco(R) R/C brands, were down 5 percent. Worldwide gross sales for the
Entertainment business, which includes Games and Puzzles, were up 18 percent
for the quarter, primarily driven by higher sales in male-action entertainment
properties, including Robots(TM), Batman(TM) and Megaman(TM).
Fisher-Price(R) Brands
First quarter worldwide gross sales for the Fisher-Price(R) Brands
business unit, which includes the Fisher-Price(R), Little People(R), Rescue
Heroes(R) and Power Wheels(R) brands, were $264.4 million, or flat versus the
prior year. This reflects strong growth in Fisher-Price(R) Friends worldwide
and Core Fisher-Price(R) internationally, offset by declines in shipments of
Core Fisher-Price(R) in the U.S., despite particularly strong performance at
retail.
American Girl(R) Brands
First quarter gross sales for the American Girl(R) Brands business unit,
which offers American Girl(R) branded products direct to consumers, were
$67.6 million, up 25 percent, driven by the January launch of a new American
Girl Today(R) doll and continued strong performance of the American Girl(R)
retail stores.
American Jobs Creation Act of 2004 ("Jobs Act") Update
As previously communicated, the company has been studying whether, or to
what extent, the company might repatriate foreign earnings under the Jobs Act.
Earlier this week, Mattel completed and approved its plan for repatriation and
reinvestment relating to the Jobs Act. Over the course of this year, Mattel
expects to repatriate up to approximately $2.4 billion in foreign earnings and
estimates that this will result in a tax liability of approximately
$180 million, which will be included in the provision for income taxes in the
second quarter. The amount of this estimated tax liability is based on
existing law and does not include the potentially favorable effects of
proposed changes to the law.
Live Webcast
Mattel will webcast its 2005 first quarter 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, logon 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 Saturday, April 16 at midnight Eastern time (9 p.m.
Pacific time) and may be accessed by dialing + (719) 457-0820. The passcode
is 2552645.
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 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 created. The Mattel family is
comprised of such best-selling brands as Hot Wheels(R), Matchbox(R), American
Girl(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
25,000 people in 42 countries and sells products in more than 150 nations
throughout the world. Mattel's vision is: 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 private label toys, 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 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 market share,
financial performance, the company's debt-to-total capital ratio goal and the
expected repatriation of foreign earnings and the tax effect thereof. Mattel
does not update forward-looking statements and expressly disclaims any
obligation to do so.
MATTEL, INC. AND SUBSIDIARIES EXHIBIT I
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For the Three Months Ended March 31,
(In millions, except per share and 2005 2004 Yr/Yr
percentage information % Net % Net %
$ Amt Sales $ Amt Sales Change
Net Sales $783.1 $780.9 0%
Cost of sales 439.1 56.1% 429.2 55.0% 2%
Gross Profit 344.0 43.9% 351.7 45.0% -2%
Advertising and promotion
expenses 87.7 11.2% 87.4 11.2% 0%
Other selling and
administrative expenses 250.8 32.0% 251.6 32.2% 0%
Operating Income 5.5 0.7% 12.7 1.6% -57%
Interest expense 17.6 2.2% 15.2 1.9% 15%
Interest (income) (12.1) -1.5% (4.9) -0.6% 147%
Other non-operating (income),
net (8.9) -1.1% (10.0) -1.3% -11%
Income Before Income Taxes 8.9 1.1% 12.4 1.6% -28%
Provision for income taxes 2.4 3.4
Net Income $6.5 0.8% $9.0 1.2% -28%
EPS - Basic $0.02 $0.02
Average Number of Common Shares
Outstanding - Basic 416.1 428.2
EPS - Diluted $0.02 $0.02
Average Number of Common and Common
Equivalent Shares Outstanding -
Diluted 421.1 432.2
MATTEL, INC. AND SUBSIDIARIES EXHIBIT II
WORLDWIDE GROSS SALES INFORMATION (Unaudited)
Three Months Ended March 31,
(In millions, except percentage
information) 2005 2004
Worldwide Gross Sales:
Mattel Brands $514.4 $532.1
% Change -3% 0%
Pos./(Neg.) Impact of Currency
(in % pts) 2 6
Fisher-Price Brands 264.4 264.0
% Change 0% 13%
Pos./(Neg.) Impact of Currency
(in % pts) 1 3
American Girl Brands 67.6 54.1
% Change 25% 17%
Other 3.9 3.3
Gross Sales $850.3 $853.5
% Change 0% 5%
Pos./(Neg.) Impact of Currency
(in % pts) 2 5
Reconciliation of GAAP to Non-GAAP
Financial Measure:
Gross Sales $850.3 $853.5
Sales Adjustments (67.2) (72.6)
Net Sales $783.1 $780.9
% Change 0% 5%
Pos./(Neg.) Impact of Currency
(in % pts) 2 5
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III
CONDENSED CONSOLIDATED BALANCE SHEETS
At March 31, At Dec. 31,
2005 2004 2004
(In millions) (Unaudited) (Unaudited)
Assets
Cash and equivalents $778.7 $788.0 $1,156.8
Accounts receivable, net 571.3 546.9 759.0
Inventories 472.6 402.6 418.6
Prepaid expenses and other
current assets 246.9 255.6 302.8
Total current assets 2,069.5 1,993.1 2,637.2
Property, plant and equipment,
net 562.5 615.1 586.5
Other noncurrent assets 1,522.2 1,497.0 1,532.8
Total Assets $4,154.2 $4,105.2 $4,756.5
Liabilities and Stockholders' Equity
Short-term borrowings $ 19.9 $ 69.7 $ 29.0
Current portion of long-term debt 188.9 51.0 189.1
Accounts payable and accrued
liabilities 669.1 725.9 1,229.2
Income taxes payable 236.0 223.3 279.9
Total current liabilities 1,113.9 1,069.9 1,727.2
Long-term debt 400.0 588.9 400.0
Other long-term liabilities 239.4 238.1 243.5
Stockholders' equity 2,400.9 2,208.3 2,385.8
Total Liabilities and
Stockholders' Equity $4,154.2 $4,105.2 $4,756.5
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited)
(In millions, except days and percentage At March 31,
information) 2005 2004
Key Balance Sheet Data:
Accounts Receivable, Net
Days of Sales Outstanding (DSO) 66 63
Inventories
Days of Supply (DOS) 89 85
Total Debt Outstanding $608.8 $709.6
Debt-to-Total Capital Ratio 20.2% 24.3%
Three Months Ended
March 31,
(In millions) 2005(a) 2004
Condensed Cash Flow Data:
Cash Flows (Used For) Operating
Activities $(375) $(373)
Cash Flows (Used For) Investing
Activities (7) (31)
Cash Flows From Financing Activities
and Other 4 39
(Decrease) in Cash and Equivalents $(378) $(365)
(a) Amounts shown are preliminary estimates. Actual amounts will be
reported in Mattel's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2005.
SOURCE Mattel, Inc.
 back to top
Related links:
http://www.mattel.com
Company News On-Call:
http://www.prnewswire.com/comp/540363.html
CONTACT:
News Media, Jules Andres, +1-310-252-3529,
Jules.Andres@mattel.com, or Securities Analysts, Dianne Douglas,
+1-310-252-2703, Dianne.Douglas@mattel.com, both of Mattel, Inc.
|
