EX-99.0 3 dex990.txt PRESS RELEASE DATED 01/31/2002 EXHIBIT 99.0 For Immmediate Release Contacts: News Media Securities Analysts Lisa Marie Bongiovanni Dianne Douglas 310-252-3524 310-252-2703 LisaMarie.Bongiovanni@mattel.com Dianne.Douglas@mattel.com
MATTEL REPORTS 2001 FOURTH QUARTER AND FULL YEAR RESULTS Full-Year Highlights . Worldwide net sales up 3 percent; . International gross sales up 10 percent; 13 percent in local currency; . Worldwide gross sales for core brands: Barbie(R) down 3 percent; Hot Wheels(R) up 9 percent; American Girl(R) up 5 percent; and core Fisher- Price(R) up 5 percent; . Gross margin improvement of 110 basis points of net sales; SG&A increased by 10 basis points of net sales driven by higher bad debt expense; . Operating income up 15 percent; and . Earnings per share of $0.81, excluding charges. Fourth Quarter Highlights . Worldwide net sales up 2 percent; . International gross sales up 17 percent; 16 percent in local currency; . Worldwide gross sales for core brands: Barbie down 2 percent; Hot Wheels up 2 percent; American Girl up 4 percent; and core Fisher-Price down 1 percent; . Gross margin improvement of 90 basis points of net sales; SG&A increased by 80 basis points of net sales driven by higher bad debt expense; . Operating income up 12 percent; and . Earnings per share of $0.33, excluding charges. EL SEGUNDO, Calif., January 31, 2002 - Mattel, Inc. (NYSE:MAT) today reported 2001 full year and fourth quarter financial results. For the year, excluding non-recurring charges, income from continuing operations was $351.6 million, or $0.81 per diluted share, an increase of 20 percent over last year's $293.3 million, or $0.69 per diluted share. Included in the full year income from continuing operations is pre-tax bad debt expense of $22.1 million recorded in the fourth quarter related to the write-down of receivables as a result of Kmart Corporation's bankruptcy filing. Including non-recurring charges, income from continuing operations was $310.9 million, or $0.71 per diluted share, compared to last year's $170.2 million, or $0.40 per diluted share. (more) Mattel Reports 2001 Fourth Quarter and Full Year Results/Page 2 For the year, net sales from continuing operations were $4.8 billion, a 3 percent increase, or 4 percent in local currency, from $4.7 billion last year. Operating income was up 15 percent at $640.8 million. On a regional basis, full year gross sales from continuing operations decreased 1 percent in the U.S. In international markets, full year gross sales from continuing operations were up 10 percent, or 13 percent in local currency. For the fourth quarter, excluding non-recurring charges, income from continuing operations was $146.0 million, or $0.33 per diluted share, an increase of 21 percent over last year's $120.6 million, or $0.28 per diluted share. Included in the fourth quarter income from continuing operations is pre-tax bad debt expense of $22.1 million related to the write-down of receivables as a result of Kmart Corporation's bankruptcy filing. Including non-recurring charges, fourth quarter income from continuing operations was $138.0 million, or $0.31 per diluted share, compared to last year's $105.1 million, or $0.25 per diluted share. Fourth quarter net sales from continuing operations were $1.6 billion, up 2 percent compared to last year's fourth quarter. Operating income was up 12 percent at $242.7 million. During the fourth quarter, domestic gross sales from continuing operations fell 8 percent, while international gross sales from continuing operations increased 17 percent, or 16 percent in local currency. "I am pleased with our performance for the year, despite modest sales growth in the fourth quarter," said Robert A. Eckert, chairman and chief executive officer of Mattel. "I am also very encouraged by the double-digit growth of our international business, which was largely offset by declines in our domestic sales as retailers canceled holiday reorders as they continued to manage their inventories in light of uncertain consumer demand. In spite of the tough retail environment and higher bad debt expense, our cash flow and profitability were strong and virtually all of our brands grew at point of sale and gained market share." (more) Mattel Reports 2001 Fourth Quarter and Full Year Results/Page 3 Girls For the year, the Girls division, which includes the Barbie, Polly Pocket!(R), and American Girl brands, achieved worldwide gross sales of $2.2 billion, an increase of 3 percent, driven primarily by double-digit sales growth of Barbie in international markets, as well as strong performances by the Polly Pocket!, What's Her Face!(TM) and Diva Starz(R) brands. Additionally, American Girl, which is part of the Girls division, experienced a 5 percent increase in sales for the year. Barbie sales declined domestically, driven by a convergence of factors, including the continuation of retailer inventory management, tighter management of Holiday Celebration Barbie shipments, and a softening demand for higher-priced, adult-targeted collector dolls. During the fourth quarter, the Girls division realized worldwide gross sales of $765.3 million, a 1 percent increase, which included a 2 percent decrease in Barbie sales. American Girl realized a 4 percent increase in sales for the quarter. Boys-Entertainment Full year, worldwide gross sales for the Boys-Entertainment division, which consists of the Wheels and Entertainment categories, were up 6 percent for the year at $1.3 billion. The Wheels category experienced a 1 percent increase in worldwide sales due to 9 percent growth in the Hot Wheels brand, which was partially offset by declines in the Matchbox(R) and Tyco R/C(R) brands. The Entertainment category experienced worldwide sales growth of 14 percent, due in large part to the successful global introduction of Harry Potter(R) branded products. For the fourth quarter, worldwide gross sales for the Boys-Entertainment division increased by 5 percent to $430.6 million, with the Entertainment division's sales growing by 14 percent, offset by a 2 percent sales decline in the Wheels division. (more) Mattel Reports 2001 Fourth Quarter and Full Year Results/Page 4 Infant and Preschool Full year, worldwide gross sales for the Infant and Preschool division, which includes the Fisher-Price, Sesame Street(R) and Disney(R) brands, were $1.6 billion, down 1 percent. Worldwide sales for core Fisher-Price brands increased by 5 percent and were offset by declines in character brand sales. While the successful launch of Tickle Me Elmo Surprise(R) has begun to reinvigorate the Sesame Street brand, its performance was offset by declines in other character brand lines. For the fourth quarter, the Infant and Preschool division experienced an 8 percent decline at $482.6 million in worldwide gross sales, with core Fisher- Price brands down 1 percent worldwide. "As I've said before, every year brings with it new challenges -- some planned, others unexpected," said Eckert. "With that said, over the next three to five years, we expect our revenue to grow moderately in the mid-single-digit range and EPS growth to be in the low double-digits at the low end of the range to mid-teens at the high end of the range." Financial Realignment Mattel recorded pre-tax charges of $11.2 million in the quarter as part of its $250 million financial realignment plan. The fourth quarter charges are largely related to the planned closure of its North American distribution and manufacturing facilities, and closure of international offices. These charges are included in Cost of Sales ($4.2 million), Other Selling and Administrative Expense ($1.4 million), Restructuring and Other Charges ($2.7 million) and Other Expense ($2.9 million) in the consolidated statement of operations. Since the announcement of the plan in September 2000, Mattel has recorded $175.4 million in pre-tax charges. The company is on target to deliver cumulative cost savings of approximately $200 million from the financial realignment plan. (more) Mattel Reports 2001 Fourth Quarter and Full Year Results/Page 5 Live Webcast Mattel will webcast its 2001 fourth quarter and full year earnings conference call at 5:30 a.m. Pacific time (8:30 a.m. Eastern time) today. The conference call will be simulcast on the "Investors & Media" section of www.mattel.com. To -------------- listen to the 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 call may be accessed beginning three hours after the completion of the live call. To listen to a replay of the call via telephone, interested parties should call on the following numbers: domestic (888) 203-1112 and international + (719) 457-0820. The passcode is 459533. The telephonic playback will be available beginning at 8:30 a.m. Pacific time (11:30 a.m. Eastern time) today for 72 hours. About Mattel Mattel, Inc. is the world's largest toy company and the leader in the design, manufacture and marketing of toys. The company's best-selling brands include Barbie(R), Hot Wheels(R), Fisher-Price(R) and American Girl(R). With headquarters in El Segundo, California, Mattel has offices and facilities in 36 countries and sells its products in more than 150 nations throughout the world. The company's corporate Web site can be found at www.mattel.com. -------------- -###- Note: Forward-looking statements included in this release with respect to the financial condition, results of operations and business of the company, which include, but are not limited to sales levels, restructuring, special charges, other non-recurring charges, cost savings, operating efficiencies and profitability, 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; significant changes in buying patterns of major customers; adverse changes in general economic conditions in the U.S. and internationally, including adverse changes in the retail environment; the impact of competition on revenues and margins; the effect of currency fluctuations on reportable income; risks associated with foreign operations; unanticipated negative results of litigation, governmental proceedings or environmental matters; and other risks and uncertainties as may be detailed from time to time in the company's public announcements and SEC filings. This release includes forward-looking statements about anticipated revenue and earnings per share growth and cost savings under the company's financial realignment plan. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so. MATTEL, INC. AND SUBSIDIARIES EXHIBIT I ================================================================================ FINANCIAL HIGHLIGHTS CONTINUING OPERATIONS - PRO FORMA BEFORE CHARGES DECEMBER 31, 2001
Three Months Ended or At Year Ended ------------------------------------- -------------------------------------- (In millions, except per share amounts) 12/31/2001 12/31/2000 % Change 12/31/2001 12/31/2000 % Change --------------------------------------- ---------- ---------- -------- ---------- ---------- -------- Key P&L Data: ------------- Net Sales $ 1,605.1 $ 1,575.1 2% $ 4,804.1 $ 4,669.9 3% Gross Margin $ 791.7 $ 762.5 4% $ 2,295.1 $ 2,179.4 5% % of Net Sales 49.3% 48.4% 47.8% 46.7% Advertising $ 248.3 $ 269.8 -8% $ 661.2 $ 681.1 -3% % of Net Sales 15.5% 17.1% 13.8% 14.6% SG&A $ 284.8 $ 265.6 7% $ 934.6 $ 908.0 3% % of Net Sales 17.7% 16.9% 19.5% 19.4% Operating Income $ 242.7 $ 216.8 12% $ 640.8 $ 558.1 15% % of Net Sales 15.1% 13.8% 13.3% 12.0% Net Income Before Charges $ 146.0 $ 120.6 21% $ 351.6 $ 293.3 20% % of Net Sales 9.1% 7.7% 7.3% 6.3% EPS Before Charges - Diluted $ 0.33 $ 0.28 $ 0.81 $ 0.69 Key Balance Sheet Data: ----------------------- Accounts Receivable, Net $ 696.6 $ 839.6 Days of Sales Outstanding (DSO) 37 45 Inventories $ 487.5 $ 489.7 Days of Supply (DOS) 107 106 Total Debt Outstanding $ 1,269.1 $ 1,501.5 Total Debt-to-Total Capitalization 42.2% 51.7% Worldwide Gross Sales: ---------------------- Girls $ 765.3 $ 754.9 $ 2,193.2 $ 2,130.2 % As Reported 1% 11% 3% 5% % Local Currency 1% 15% 4% 8% Boys/Entertainment $ 430.6 $ 409.2 $ 1,269.1 $ 1,195.7 % As Reported 5% -2% 6% 0% % Local Currency 5% 3% 7% 2% Infant & Preschool $ 482.6 $ 525.3 $ 1,621.3 $ 1,636.4 % As Reported -8% 1% -1% 0% % Local Currency -9% 5% -1% 3% Total Company $ 1,690.8 $ 1,693.3 $ 5,104.1 $ 4,981.7 % As Reported 0% 5% 2% 2% % Local Currency 0% 8% 3% 5%
MATTEL, INC. AND SUBSIDIARIES EXHIBIT II ================================================================================ PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS DECEMBER 31, 2001
Three Months Ended Dec. 31, 2001 Year Ended Dec. 31, 2001 -------------------------------- ----------------------------------- Pro Forma Pro Forma As Impact of Before As Impact of Before (In millions, except per share amounts) Reported Charges Charges Reported Charges Charges --------------------------------------- -------- --------- --------- ------------ --------- ------------ Net Sales $ 1,605.1 $ 0.0 $ 1,605.1 $ 4,804.1 $ 0.0 $ 4,804.1 Cost of sales 817.6 4.2 813.4 2,537.2 28.2 2,509.0 -------- --------- --------- ------------ -------- ----------- Gross Profit 787.5 (4.2) 791.7 2,266.9 (28.2) 2,295.1 Advertising and promotion expenses 248.3 0.0 248.3 661.5 0.3 661.2 Other selling and administrative expenses 286.2 1.4 284.8 936.1 1.5 934.6 Restructuring and other charges 2.7 2.7 0.0 15.7 15.7 0.0 Other expense, net 5.9 2.9 3.0 17.4 10.0 7.4 -------- --------- --------- ------------ -------- ----------- Operating Income Before Amortization 244.4 (11.2) 255.6 636.2 (55.7) 691.9 Amortization of intangibles 12.9 0.0 12.9 51.1 0.0 51.1 -------- --------- --------- ------------ -------- ----------- Operating Income 231.5 (11.2) 242.7 585.1 (55.7) 640.8 Interest expense 41.1 0.0 41.1 155.1 0.0 155.1 --------- --------- --------- ------------ -------- ----------- Income Before Income Taxes 190.4 (11.2) 201.6 430.0 (55.7) 485.7 Provision for income taxes 52.4 (3.2) 55.6 119.1 (15.0) 134.1 --------- --------- --------- ------------ -------- ----------- Income From Continuing Operations 138.0 $ (8.0) $ 146.0 $ 310.9 $ (40.7) $ 351.6 Cumulative effect of change in accounting principles, net of tax 0.0 0.0 0.0 (12.0) (12.0) 0.0 --------- --------- --------- ------------ -------- ----------- Net Income $ 138.0 $ (8.0) $ 146.0 $ 298.9 $ (52.7) $ 351.6 ========= ========= ========= ============ ======== =========== Income Per Share - Basic Income from continuing operations $ 0.32 $ (0.02) $ 0.34 $ 0.72 $ (0.10) $ 0.82 Cumulative effect of change in accounting principles 0.00 0.00 0.00 (0.03) (0.03) 0.00 --------- --------- --------- ------------ -------- ----------- $ 0.32 $ (0.02) $ 0.34 $ 0.69 $ (0.13) $ 0.82 ========= ======== ========= ============ ======== =========== Average Number of Common Shares Outstanding - Basic 431.8 431.8 431.8 431.0 431.0 431.0 ========= ======== ========= ============ ======== =========== Income Per Share - Diluted Income from continuing operations $ 0.31 $ (0.02) $ 0.33 $ 0.71 $ (0.10) $ 0.81 Cumulative effect of change in accounting principles 0.00 0.00 0.00 (0.03) (0.03) 0.00 --------- --------- --------- ------------ -------- ----------- $ 0.31 $ (0.02) $ 0.33 $ 0.68 $ (0.13) $ 0.81 ========= ======== ========= ============ ======== =========== Average Number of Common and Common Equivalent Shares Outstanding - Diluted 437.5 437.5 437.5 436.2 436.2 436.2 ========= ======== ========= ============ ======== =========== Three Months Ended Dec. 31, 2000 Year Ended Dec. 31, 2000 -------------------------------- ----------------------------------- Pro Forma Pro Forma As Impact of Before As Impact of Before (In millions, except per share amounts) Reported Charges Charges Reported Charges Charges --------------------------------------- -------- --------- --------- ------------ --------- ------------ Net Sales $ 1,575.1 $ 0.0 $ 1,575.1 $ 4,669.9 $ 0.0 $ 4,669.9 Cost of sales 819.2 6.6 812.6 2,569.1 78.6 2,490.5 --------- --------- --------- ------------ -------- ----------- Gross Profit 755.9 (6.6) 762.5 2,100.8 (78.6) 2,179.4 Advertising and promotion expenses 270.8 1.0 269.8 685.9 4.8 681.1 Other selling and administrative expenses 269.4 3.8 265.6 967.0 59.0 908.0 Restructuring and other charges 0.0 0.0 0.0 15.9 15.9 0.0 Other expense (income), net 9.4 11.9 (2.5) 1.6 20.9 (19.3) --------- --------- --------- ------------ -------- ----------- Operating Income Before Amortization 206.3 (23.3) 229.6 430.4 (179.2) 609.6 Amortization of intangibles 12.8 0.0 12.8 52.0 0.5 51.5 --------- --------- --------- ------------ -------- ----------- Operating Income 193.5 (23.3) 216.8 378.4 (179.7) 558.1 Interest expense 50.1 0.0 50.1 153.0 0.0 153.0 --------- --------- --------- ------------ -------- ----------- Income Before Income Taxes 143.4 (23.3) 166.7 225.4 (179.7) 405.1 Provision for income taxes 38.3 (7.8) 46.1 55.2 (56.6) 111.8 --------- --------- --------- ------------ -------- ----------- Income From Continuing Operations 105.1 (15.5) 120.6 170.2 (123.1) 293.3 Loss from discontinued operations, net of tax (34.0) (34.0) 0.0 (601.2) (601.2) 0.0 --------- --------- --------- ------------ -------- ----------- Net Income (Loss) $ 71.1 $ (49.5) $ 120.6 $ (431.0) $ (724.3) $ 293.3 ========= ======== ========= ============ ======== =========== Income Per Share - Basic Income from continuing operations $ 0.25 $ (0.03) $ 0.28 $ 0.40 $ (0.29) $ 0.69 Loss from discontinued operations (0.08) (0.08) 0.00 (1.41) (1.41) 0.00 --------- --------- --------- ------------ -------- ----------- $ 0.17 $ (0.11) $ 0.28 $ (1.01) $ (1.70) $ 0.69 ========= ======== ========= ============ ======== =========== Average Number of Common Shares Outstanding - Basic 426.9 426.9 426.9 426.2 426.2 426.2 ========= ======== ========= ============ ======== =========== Income Per Share - Diluted Income from continuing operations $ 0.25 $ (0.03) $ 0.28 $ 0.40 $ (0.29) $ 0.69 Loss from discontinued operations (0.08) (0.08) 0.00 (1.41) (1.41) 0.00 --------- --------- --------- ------------ --------- ----------- $ 0.17 $ (0.11) $ 0.28 $ (1.01) $ (1.70) $ 0.69 ========= ======== ========= ============ ======== =========== Average Number of Common and Common Equivalent Shares Outstanding - Diluted 428.5 428.5 428.5 427.1 427.1 427.1 ========= ======== ========= ============ ======== ===========
MATTEL, INC. AND SUBSIDIARIES EXHIBIT III ================================================================================ CONSOLIDATED STATEMENTS OF OPERATIONS BEFORE CHARGES
For Three Months Ended Dec. 31, ----------------------------------------------------------------- 2001 2000 -------------------------- ------------------------- (In millions, except per share amounts) $ Amt % Net Sales $ Amt % Net Sales % Change --------------------------------------- ------------ ----------- --------- ----------- -------- Net Sales $ 1,605.1 $ 1,575.1 1.9% Cost of sales 813.4 50.7% 812.6 51.6% 0.1% ---------- --------- Gross Profit 791.7 49.3% 762.5 48.4% 3.8% Advertising and promotion expenses 248.3 15.5% 269.8 17.1% -8.0% Other selling and administrative expenses 284.8 17.7% 265.6 16.9% 7.3% Other expense (income), net 3.0 0.2% (2.5) -0.2% ---------- --------- Operating Income Before Amortization 255.6 15.9% 229.6 14.6% 11.3% Amortization of intangibles 12.9 0.8% 12.8 0.8% 0.5% ---------- --------- Operating Income 242.7 15.1% 216.8 13.8% 12.0% Interest expense 41.1 2.6% 50.1 3.2% -18.0% ---------- --------- Income Before Income Taxes 201.6 12.6% 166.7 10.6% 20.9% Provision for income taxes 55.6 46.1 ---------- --------- Income From Continuing Operations $ 146.0 9.1% $ 120.6 7.7% 21.0% ========== ========= Effective Tax Rate 27.6% 27.6% Basic Income per Share from Continuing Operations $ 0.34 $ 0.28 ========== ========= Diluted Income per Share from Continuing Operations $ 0.33 $ 0.28 ========== ========= For Year Ended Dec. 31, ----------------------------------------------------- 2001 2000 -------------------------- ------------------------ (In millions, except per share amounts) $ Amt % Net Sales $ Amt % Net Sales % Change --------------------------------------- ----------- ------------ ---------- ------------ -------- Net Sales $ 4,804.1 $ 4,669.9 2.9% Cost of sales 2,509.0 52.2% 2,490.5 53.3% 0.7% ----------- ---------- Gross Profit 2,295.1 47.8% 2,179.4 46.7% 5.3% Advertising and promotion expenses 661.2 13.8% 681.1 14.6% -2.9% Other selling and administrative expenses 934.6 19.5% 908.0 19.4% 2.9% Other expense (income), net 7.4 0.2% (19.3) -0.4% ----------- ---------- Operating Income Before Amortization 691.9 14.4% 609.6 13.1% 13.5% Amortization of intangibles 51.1 1.1% 51.5 1.1% -0.8% ----------- ---------- Operating Income 640.8 13.3% 558.1 12.0% 14.8% Interest expense 155.1 3.2% 153.0 3.3% 1.4% ----------- ---------- Income Before Income Taxes 485.7 10.1% 405.1 8.7% 19.9% Provision for income taxes 134.1 111.8 ----------- ---------- Income From Continuing Operations $ 351.6 7.3% $ 293.3 6.3% 19.9% =========== ========== Effective Tax Rate 27.6% 27.6% Basic Income per Share from Continuing Operations $ 0.82 $ 0.69 ============ ========== Diluted Income per Share from Continuing Operations $ 0.81 $ 0.69 ============ ===========
================================================================================ CONDENSED CONSOLIDATED BALANCE SHEETS At Dec. 31, ------------------------- (In millions) 2001 2000 ------------- ----------- ----------- Assets Cash and short-term investments $ 616.6 $ 232.4 Accounts receivable, net 696.6 839.6 Inventories 487.5 489.7 Prepaid expenses and other current assets 291.9 189.8 ----------- ----------- Total current assets 2,092.6 1,751.5 Property, plant and equipment, net 626.7 647.8 Other assets 1,821.3 1,902.6 Net investment in discontinued operations - 11.5 ----------- ----------- Total Assets $ 4,540.6 $ 4,313.4 =========== =========== Liabilities and Stockholders' Equity Short-term borrowings $ 38.1 $ 226.4 Current portion of long-term liabilities 210.1 32.7 Accounts payable and accrued liabilities 1,109.0 1,042.4 Income taxes payable 239.8 200.9 ----------- ----------- Total current liabilities 1,597.0 1,502.4 Long-term debt 1,020.9 1,242.4 Other long-term liabilities 184.2 165.5 Stockholders' equity 1,738.5 1,403.1 ----------- ----------- Total Liabilities and Stockholders' Equity $ 4,540.6 $ 4,313.4 =========== ============