First Quarter Highlights
* Worldwide net sales up 19 percent;
* Domestic gross sales up 10 percent and international gross sales up 29
percent;
* Worldwide gross sales for core brands: Barbie(R) up 2 percent; Hot
Wheels(R) up 14 percent; Core Fisher-Price(R) up 27 percent and American
Girl(R) brands up 2 percent;
* Gross margin increased 270 basis points of net sales; SG&A decreased 360
basis points of net sales;
* Operating income was $20.6 million compared to operating loss of $32.0
million in the first quarter of 2006; and
* Earnings per share of $0.03 vs. prior year of $0.08, which included a tax
benefit from settlements of $0.15.
EL SEGUNDO, Calif., April 16 /PRNewswire-FirstCall/ -- Mattel, Inc.
(NYSE: MAT) today reported 2007 first quarter financial results. For the
quarter, the company reported net income of $12 million, or $0.03 per
share, compared to last year's first quarter net income of $30.2 million,
or $0.08 per share. Last year's quarterly net income was positively
impacted by tax benefits of approximately $57 million, or $0.15 per share,
relating to audit settlements with foreign tax authorities.
"While not a particularly significant quarter within the seasonal toy
industry, our positive first quarter results are a good start to the year,"
said Robert A. Eckert, chairman and chief executive officer of Mattel. "I
am pleased with the performance of our strong portfolio of brands,
including nice increases in the Fisher-Price(R) and Wheels businesses and
continued strength of the Disney/Pixar CARS(TM) entertainment property. Our
international business continued to generate strong growth around the
world, and we benefited from improved gross margins."
Financial Overview
For the quarter, net sales were $940.3 million, up 19 percent compared
to $793.3 million last year, including favorable changes in currency
exchange rates of 3 percentage points. On a regional basis, first quarter
gross sales increased 10 percent in the U.S. and increased 29 percent in
international markets, including favorable changes in currency exchange
rates of 7 percentage points. Operating income for the quarter was $20.6
million, compared to prior year's operating loss for the quarter of $32.0
million, which included $13 million of severance charges.
The company's debt-to-total-capital ratio of 19.8 percent is in line
with the company's capital and investment framework. Consistent with the
seasonality of the business, during the quarter the company's cash and
equivalents declined by approximately $221 million, compared with a decline
of approximately $394 million in last year's first quarter.
Sales by Business Unit
Mattel Girls and Boys Brands
For the first quarter, worldwide gross sales for the Mattel Girls &
Boys Brands business unit were $567 million, up 15 percent versus a year
ago. Worldwide gross sales for the Barbie(R) brand were up 2 percent, with
increases in international markets offsetting declines in the U.S.
Worldwide gross sales for Other Girls Brands were down 8 percent, with
gains in the Disney Princesses and Polly Pocket!(TM) toy lines offset by
declines in the Winx(TM) and Pixel Chix(TM) toy lines. Worldwide gross
sales for the Wheels category, which includes the Hot Wheels(R),
Matchbox(R) and Tyco(R) R/C brands, were up 15 percent, led by double-digit
growth in the Hot Wheels(R) and Matchbox(R) lines. Worldwide gross sales
for the Entertainment business, which includes Radica(R) and Games and
Puzzles, were up 59 percent for the quarter, reflecting strong performance
in the CARS(TM) entertainment property and the addition of Radica(R).
Fisher-Price Brands
First quarter worldwide gross sales for the Fisher-Price Brands
business unit, which includes the Fisher-Price(R) Core, Fisher-Price(R)
Friends and the Power Wheels(R) brand, were $391.3 million, or up 27
percent versus the prior year. This reflects strong growth in
Fisher-Price(R) Friends and Core Fisher- Price(R) worldwide.
American Girl Brands
First quarter gross sales for the American Girl Brands business unit,
which offers American Girl(R) branded products directly to consumers, were
$62.9 million, up 2 percent versus last year.
Live Webcast
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, April 17th at midnight Eastern time (9 p.m. Pacific time) and may
be accessed by dialing + (719) 457-0820. The passcode is 9092453.
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)
and 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 outlook
for the year and the company's debt-to-total capital ratio in relation to
the company's capital and investment framework. 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)
(In millions,
except per share For the Three Months Ended March 31,
and percentage 2007 2006 Yr / Yr
information) $ Amt % Net Sales $ Amt % Net Sales % Change
Net Sales $940.3 $793.3 19%
Cost of sales 521.6 55.5% 461.3 58.2% 13%
Gross Profit 418.7 44.5% 332.0 41.8% 26%
Advertising and
promotion
expenses 105.3 11.2% 88.9 11.2% 19%
Other selling and
administrative
expenses 292.8 31.1% 275.1 34.7% 6%
Operating Income
(Loss) 20.6 2.2% (32.0) -4.0%
Interest expense 14.5 1.5% 15.2 1.9% -5%
Interest (income) (12.0) -1.3% (8.8) -1.1% 36%
Other non-operating
expense (income),
net 2.4 (1.9)
Income (Loss) Before
Income Taxes 15.7 1.7% (36.5) -4.6%
Provision (benefit)
for income taxes 3.7 (66.7)
Net Income $12.0 1.3% $30.2 3.8%
EPS - Basic $0.03 $0.08
Average Number of
Common Shares
Outstanding -
Basic 389.9 388.8
EPS - Diluted $0.03 $0.08
Average Number of
Common and Common
Equivalent Shares
Outstanding -
Diluted 396.8 391.3
MATTEL, INC. AND SUBSIDIARIES EXHIBIT II
WORLDWIDE GROSS SALES INFORMATION (Unaudited)
Three Months Ended March 31,
(In millions, except percentage information) 2007 2006
Worldwide Gross Sales:
Mattel Girls & Boys Brands $567.0 $493.2
% Change 15% -4%
Pos./(Neg.) Impact of Currency (in % pts) 4 (2)
Fisher-Price Brands 391.3 307.2
% Change 27% 16%
Pos./(Neg.) Impact of Currency (in % pts) 2 (2)
American Girl Brands 62.9 61.9
% Change 2% -9%
Other 3.6 3.2
Gross Sales $1,024.8 $865.5
% Change 18% 2%
Pos./(Neg.) Impact of Currency (in % pts) 3 (2)
Reconciliation of GAAP to Non-GAAP
Financial Measure:
Gross Sales $1,024.8 $865.5
Sales Adjustments (84.5) (72.2)
Net Sales $940.3 $793.3
% Change 19% 1%
Pos./(Neg.) Impact of Currency (in % pts) 3 (2)
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III
CONDENSED CONSOLIDATED BALANCE SHEETS
At March 31, At Dec. 31,
2007 2006 2006
(In millions) (Unaudited)
Assets
Cash and equivalents $984.2 $603.3 $1,205.6
Accounts receivable, net 730.6 585.0 943.8
Inventories 448.6 410.8 383.1
Prepaid expenses and other
current assets 202.0 284.3 317.6
Total current assets 2,365.4 1,883.4 2,850.1
Property, plant and
equipment, net 518.8 535.2 536.7
Other noncurrent assets 1,583.4 1,446.2 1,569.1
Total Assets $4,467.6 $3,864.8 $4,955.9
Liabilities and
Stockholders' Equity
Short-term borrowings $-- $43.5 $--
Current portion of
long-term debt 90.0 100.0 64.3
Accounts payable and
accrued liabilities 733.0 648.1 1,356.3
Income taxes payable 23.7 108.5 161.9
Total current liabilities 846.7 900.1 1,582.5
Long-term debt 560.0 525.0 635.7
Other noncurrent liabilities 428.2 282.8 304.7
Stockholders' equity 2,632.7 2,156.9 2,433.0
Total Liabilities and
Stockholders' Equity $4,467.6 $3,864.8 $4,955.9
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited)
At March 31,
(In millions, except days
and percentage information) 2007 2006
Key Balance Sheet Data:
Accounts Receivable, Net
Days of Sales Outstanding (DSO) 70 66
Inventories
Days of Supply (DOS) 76 72
Total Debt Outstanding $650.0 $668.5
Total Debt-to-Total Capital
Ratio 19.8% 23.7%
Year Ended March 31,
(In millions) 2007 (a) 2006
Condensed Cash Flow Data:
Cash Flows (Used For)
Operating Activities $(327) $(290)
Cash Flows (Used For)
Investing Activities (24) (28)
Cash Flows From (Used For)
Financing Activities and Other 130 (76)
(Decrease) in Cash and
Equivalents $(221) $(394)
(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, 2007.
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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