Mattel Reports Third Quarter 2013 Financial Results and Declares Fourth Quarter Dividend Third Quarter Highlights *Worldwide net sales up 6%; *North American^1 gross sales up 3% and International gross sales up 9%; *Worldwide gross sales by core brands: Barbie^® up 3%; Hot Wheels^® down 2%; Fisher-Price^® flat; and American Girl^® up 20%; *Gross margin increased 10 basis points of net sales; SG&A decreased 30 basis points of net sales; *Operating income of $528.2 million compared to operating income of $487.4 million in the third quarter of 2012; and *Earnings per share of $1.21 (includes tax benefit of $0.05 per share) vs. prior year earnings per share of $1.04. Capital Deployment *Board declared 2013 fourth quarter cash dividend of $0.36 per share, reflecting an annualized dividend of $1.44 per share; and *The Company repurchased 6.1 million shares of its common stock during the third quarter at a cost of approximately $259 million. Business Wire EL SEGUNDO, Calif. -- October 16, 2013 Mattel, Inc. (NASDAQ:MAT) today reported 2013 third quarter financial results. For the quarter, the Company reported net income of $422.8 million, or $1.21 per share, compared to last year’s third quarter net income of $365.9 million, or $1.04 per share. “We are pleased with our third quarter performance as Mattel delivered growth in every region of the world, expanded our operating margins, further strengthened our balance sheet and returned more capital to our shareholders,” said Bryan G. Stockton, Mattel Chairman and Chief Executive Officer. “As we enter the all-important holiday season, we have a strong lineup of innovative products, promotions and content, and we will continue to focus on execution to deliver growth and long-term shareholder value.” Financial Overview For the quarter, net sales were $2.21 billion, up 6%, including an unfavorable change in currency exchange rates of 1 percentage point. On a regional basis, third quarter gross sales increased 3% in the North American Region, which consists of the U.S., Canada and American Girl, with no impact from changes in currency exchange rates. For the International Region, gross sales increased 9%, including an unfavorable impact of currency exchange rates of 2 percentage points. Operating income for the quarter was $528.2 million, compared to prior year’s operating income of $487.4 million. The Company’s debt-to-total-capital ratio was 36.5%. For the first nine months of the year, the Company’s cash and equivalents decreased by approximately $929 million, compared with a decline of approximately $1.09 billion during the same period last year. For the first nine months of the year, cash flows used for operating activities were approximately $321 million, an increase of $220 million compared to approximately $101 million of cash flows used for operating activities in the same period of 2012. The increase is primarily due to higher working capital usage, partially offset by higher net income. Cash flows used for investing activities were approximately $176 million, a decrease of $657 million, compared to approximately $833 million in 2012, driven primarily by the prior year acquisition of HIT Entertainment. Cash flows used for financing and other activities were approximately $432 million, an increase of $279 million, compared to approximately $153 million in 2012, primarily due to higher share repurchases and repayments of long-term debt, partially offset by net proceeds received from the issuance of long-term debt. Capital Deployment The Company announced today that its Board of Directors declared a fourth quarter cash dividend of $0.36 per share on the Company's common stock. The dividend will be payable on December 13, 2013, to stockholders of record on November 27, 2013. The dividend is the final of four quarterly dividends the Company will have paid this year, reflecting an annualized dividend of $1.44 per share, which represents a 16% increase to last year’s total dividends. During the third quarter of 2013, the Company repurchased 6.1 million shares of its common stock at a cost of approximately $259 million. Sales by Brand Mattel Girls and Boys Brands For the third quarter, worldwide gross sales for Mattel Girls & Boys Brands were $1.48 billion, up 8% versus the prior year. Worldwide gross sales for the Barbie ^ brand were up 3%. Worldwide gross sales for Other Girls Brands were up 28%, primarily driven by Monster High^®. Worldwide gross sales for the Wheels category, which includes the Hot Wheels, Matchbox^® and Tyco R/C^® brands, were down 9%, primarily driven by Tyco R/C and Matchbox. Worldwide gross sales for the Entertainment business, which also includes Radica^® and Games, were up 7%, primarily driven by the Disney Planes movie property. Fisher-Price Brands Third quarter worldwide gross sales for Fisher-Price Brands, which includes the Fisher-Price Core, Fisher-Price Friends and Power Wheels^® brands, were $789.3 million, or flat versus the prior year. American Girl Brands Third quarter gross sales for American Girl Brands, which offers American Girl-branded products directly to consumers, were $122.3 million, up 20% versus the prior year, driven by Saige, the 2013 Girl of the Year, My American Girl, Bitty Baby and Historical dolls. Live Webcast Mattel will webcast its 2013 third quarter financial results conference call at 8:30 a.m. Eastern time today. The conference call will be webcast on the "Investors" section of the Company's corporate website: http://corporate.mattel.com. To listen to the live call, log on to the website at least 15 minutes early to register and download and install any necessary audio software. An archive of the webcast will be available on the company’s website 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 the morning of the call until Wednesday, October 23, at midnight Eastern time and may be accessed by dialing + (404) 537-3406. The passcode is 58903743. 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” section of http://corporate.mattel.com, under the sub-headings “Financial Information” – “Earnings Releases.” About Mattel, Inc. Mattel, Inc. (NASDAQ:MAT) is the worldwide leader in the design, manufacture and marketing of toys and family products. The Mattel family is comprised of such best-selling brands as Barbie^®, the most popular fashion doll ever produced, Hot Wheels^®, Monster High^®, American Girl^®, Thomas & Friends^® and Fisher-Price^® brands, including Little People^® and Power Wheels^®, as well as a wide array of entertainment-inspired toy lines. In 2013, Mattel was named as one of FORTUNE Magazine's "100 Best Companies to Work For" for the sixth year in a row and as one of the "World's Most Ethical Companies" by Ethisphere Magazine. Mattel also is ranked No. 2 on Corporate Responsibility Magazine's "100 Best Corporate Citizens" list. With worldwide headquarters in El Segundo, Calif., Mattel employs nearly 30,000 people in 40 countries and territories and sells products in more than 150 nations. At Mattel, we are Creating the Future of Play. Visit us at www.mattel.com, www.facebook.com/mattel or www.twitter.com/mattel Note: This press release contains forward-looking statements relating to the Company's expected financial performance and expected quarterly cash dividend payments in 2013. These forward-looking statements are based on currently available operating, financial, economic and other information and are subject to a number of significant risks and uncertainties. A variety of factors, many of which are beyond our control, could cause actual future results to differ materially from those projected in the forward-looking statements. Some of these factors are described in the Company's periodic filings with the Securities and Exchange Commission, including the "Risk Factors" section of Mattel's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and Mattel's Quarterly Reports on Form 10-Q for fiscal year 2013, as well as in Mattel's other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so. MAT-FIN ^1 Consists of the North America Division (U.S. & Canada) and American Girl MATTEL, INC. EXHIBIT AND I SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, (In millions, except per Yr / share and 2013 2012 Yr 2013 2012 Yr / Yr percentage information) $ Amt % Net $ Amt % Net % $ Amt % Net $ Amt % Net % Sales Sales Change Sales Sales Change Net Sales $ 2,207.0 $ 2,077.8 6 % $ 4,371.7 $ 4,165.0 5 % Cost of 1,019.0 46.2 % 962.4 46.3 % 6 % 2,043.7 46.7 % 1,981.7 47.6 % 3 % sales Gross Profit 1,188.0 53.8 % 1,115.4 53.7 % 7 % 2,328.0 53.3 % 2,183.3 52.4 % 7 % Advertising and promotion 249.4 11.3 % 234.8 11.3 % 6 % 467.3 10.7 % 445.0 10.7 % 5 % expenses Other selling and 410.4 18.6 % 393.2 18.9 % 4 % 1,171.9 26.8 % 1,090.8 26.2 % 7 % administrative expenses Operating 528.2 23.9 % 487.4 23.5 % 8 % 688.8 15.8 % 647.5 15.5 % 6 % Income Interest 19.6 0.9 % 22.7 1.1 % -14 % 58.2 1.3 % 65.4 1.6 % -11 % expense Interest (1.4 ) -0.1 % (1.5 ) -0.1 % -5 % (4.1 ) -0.1 % (5.2 ) -0.1 % -21 % (income) Other non-operating (4.3 ) (0.6 ) (2.5 ) (1.1 ) (income), net Income Before 514.3 23.3 % 466.8 22.5 % 10 % 637.2 14.6 % 588.4 14.1 % 8 % Income Taxes Provision for 91.5 100.9 102.5 118.4 income taxes Net Income $ 422.8 19.2 % $ 365.9 17.6 % 16 % $ 534.7 12.2 % $ 470.0 11.3 % 14 % Net Income Per Common Share - $ 1.22 $ 1.06 $ 1.54 $ 1.36 Basic Weighted average number 343.3 342.6 344.7 341.0 of common shares Net Income Per Common Share - $ 1.21 $ 1.04 $ 1.52 $ 1.35 Diluted Weighted average number of common and potential 346.7 347.1 348.6 345.4 common shares MATTEL, INC. EXHIBIT AND II SUBSIDIARIES WORLDWIDE GROSS SALES INFORMATION (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (In millions, except 2013 2012 2013 2012 percentage information) Worldwide Gross Sales: Mattel Girls & Boys $ 1,480.7 $ 1,371.1 $ 2,965.3 $ 2,775.0 Brands % Change 8 % 3 % 7 % 0 % Pos./(Neg.) Impact of -1 -5 -1 -4 Currency (in % pts) Fisher-Price 789.3 790.4 1,473.3 1,507.9 Brands % Change 0 % 6 % -2 % 3 % Pos./(Neg.) Impact of -1 -2 0 -3 Currency (in % pts) American 122.3 102.0 300.9 246.7 Girl Brands % Change 20 % 16 % 22 % 9 % Other 10.0 10.2 29.4 28.0 Gross Sales $ 2,402.3 $ 2,273.7 $ 4,768.9 $ 4,557.6 % Change 6 % 4 % 5 % 2 % Pos./(Neg.) Impact of 0 -4 0 -3 Currency (in % pts) Reconciliation of Non-GAAP to GAAP Financial Measure: Gross Sales $ 2,402.3 $ 2,273.7 $ 4,768.9 $ 4,557.6 Sales (195.3 ) (195.9 ) (397.2 ) (392.6 ) Adjustments Net Sales $ 2,207.0 $ 2,077.8 $ 4,371.7 $ 4,165.0 % Change 6 % 4 % 5 % 1 % Pos./(Neg.) Impact of -1 -3 -1 -3 Currency (in % pts) MATTEL, INC. AND EXHIBIT SUBSIDIARIES III CONDENSED CONSOLIDATED BALANCE SHEETS At At September 30, December 31, 2013 2012 (a) 2012 (In millions) (Unaudited) Assets Cash and equivalents $ 406.5 $ 282.1 $ 1,335.7 Accounts receivable, 1,885.2 1,828.2 1,226.8 net Inventories 807.2 796.4 465.1 Prepaid expenses and other 538.6 366.6 529.2 current assets Total current assets 3,637.5 3,273.3 3,556.8 Property, plant, and 634.8 575.3 593.2 equipment, net Other noncurrent assets 2,424.0 2,470.1 2,376.8 Total Assets $ 6,696.3 $ 6,318.7 $ 6,526.8 Liabilities and Stockholders' Equity Short-term borrowings $ 77.8 $ 154.5 $ 9.8 Current portion of 50.0 350.0 400.0 long-term debt Accounts payable and accrued 1,278.0 1,111.6 1,273.2 liabilities Income taxes payable 65.8 47.3 33.0 Total current 1,471.6 1,663.4 1,716.0 liabilities Long-term debt 1,600.0 1,150.0 1,100.0 Other noncurrent 616.5 601.4 643.8 liabilities Stockholders' equity 3,008.2 2,903.9 3,067.0 Total Liabilities and $ 6,696.3 $ 6,318.7 $ 6,526.8 Stockholders' Equity SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited) At September 30, (In millions, except days and 2013 2012 percentage information) Key Balance Sheet Data: Accounts receivable, net days 77 79 of sales outstanding (DSO) Total debt outstanding $ 1,727.8 $ 1,654.5 Total debt-to-total 36.5 % 36.3 % capital ratio Nine Months Ended September 30, (In millions) 2013 (b) 2012 (a) Condensed Cash Flow Data: Cash flows (used for) $ (321 ) $ (101 ) operating activities Cash flows (used for) (176 ) (833 ) investing activities Cash flows (used for) financing activities and (432 ) (153 ) other Decrease in cash and $ (929 ) $ (1,087 ) equivalents Certain balances related to the acquisition of HIT Entertainment have (a) been retrospectively adjusted to reflect their final acquisition-date fair values. Amounts shown are preliminary estimates. Actual amounts will be reported (b) in Mattel's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013. Contact: News Media Mattel, Inc. Dallas Lawrence +1-310-252-6397 firstname.lastname@example.org or Securities Analysts Mattel, Inc. Drew Vollero +1-310-252-2703 email@example.com
Mattel Reports Third Quarter 2013 Financial Results and Declares Fourth Quarter Dividend
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